How One Government Plans to Make $400 Million a Year From Social Media Gossip
Last week Ugandan president Yoweri Museveni warned people of immoral practices that were corrupting society. “One of them is what they call oral sex,” he said. “The mouth is for eating, not for sex.”
The audience got a good chuckle from that one, but few were laughing a month earlier when he warned of another practice that was corrupting society: Gossip, or lugambo, if you speak Lugwere.
He was specifically talking about social media gossip.
He’s sick of people talking shit online and wants them to pay consequences for their actions — by taxing them.
In March he wrote a letter proposing a social media tax that would affect users on networks like Facebook, Twitter, and WhatsApp.
According to the Daily Monitor, his letter read:
“I am not going to propose a tax on internet use for educational, research or reference purposes… these must remain free. However, olugambo on social media (opinions, prejudices, insults, friendly chats) and advertisements by Google and I do not know who else must pay tax because we need resources to cope with the consequences of their lugambo.”
Mr. Museveni wants to tax users who use over-the-top (OTT) networks a fee of 100 Ugandan Shillings ($0.03) per day. Doing so, he estimates, can generate revenue “in the magnitude of $400m per year.”
As expected, he faced backlash.
Mr. Museveni eventually backpedaled on his threat just a few weeks after proposing it, but the idea still has support from political officials, as well as some Ugandan citizens.
Citizen Paul Wepukhulu Mutambo wrote an op-ed for the Daily Monitor where he said:
“The proposed tax of Shs100 on social media users per day is spot on and I want to commend President Museveni for the move, which is long overdue. The fact is that Shs100 per day or Shs3,000 per month cannot be felt by the taxpayer.
A Ugandan Cabinet Minister said the tax would spur the growth of local content.
“The president was simply challenging us to come up with our own content and take it online. The tax is on consumption of the content produced by foreign developers.”
Mr. Museveni’s proposed social media tax earned praise from the World Bank, and the idea of taxing OTTs has been hotly debated in almost every country in the world.
An OTT service is a service that functions over the top of your Internet Service Provider (ISP). An ISP is a company that allows you to access the Internet. Verizon, AT&T, and Comcast are ISPs. Facebook, WhatsApp, and Netflix are OTTs.
OTTs don’t have to pay ISPs, but they use ISP infrastructure and then make money from ISP customers. Clearly, many people have a problem with this.
Facebook alone generated $40.65 billion in revenue in 2017. That’s one reason why the FCC voted to repeal Net Neutrality.
Under Net Neutrality, ISPs had to treat all web traffic data as equal. Now, after the repeal, they can slow down speeds for users who, for example, access Facebook and Netflix regularly. Then they can charge those users more money for faster speeds.
In 2010, Mark Zuckerberg said Facebook would always be free. This month, when asked again, he left the door open for a paid version by saying, “There will always be a version of Facebook that is free.”
All around the world, governments are trying to figure out what to do with OTTs.
Most Americans would probably rather pay a tax of $0.03 a day, which totals about $11 a year, than pay a subscription fee imposed by ISPs just to use Facebook and Twitter.
A recent survey found that 42% of participants would pay between $1 and $5 a month for an ads-free Facebook experience. Another 25% said they’d pay between $6 and $10 a month.
A group of economists from MIT and the University of Groningen found that Facebook access is worth between $30 and $70 a month to most people.
Imposing social media taxes may sound as ridiculous as reminding people that mouths are made for eating, but the logic is hard to argue.
