It is undoubtedly one of the most recognized platform in the modern day to do business, with its effectiveness drawing more users and businesses on the platform. Social media has been a marketing tool, a bridge between the producer and consumer, making customer experience better and much more. Now, it seems there is a dwindling hope in Uganda with the introduction of social media taxes and not to forget mobile money taxes.
The step by the Government of Uganda has been addresses as a ‘retrogression in business’ due to the dependability of the tech platform to spur businesses. Facebook and Twitter users will undergo a painful path of gratification, as their operations have been affected with the newly revised 0.5% tax, following the President’s order to reduce the percentage from a shocking 1%. Still, it makes no difference, as the public laments the decision by the Parliament.
The technology industry is merely coming up in East Africa but the suppressing issues of taxes could be a major blow for the sector. Not every business especially the start-up can afford to pay the new tax either by money transfer or social media. It could cripple their financial operations, and may be short-lived to see their future flourish.
Surely, the Government is looking to raise revenues through taxes but could do better. Widening the tax base could be a probable option and the Parliament could find a way to increase its revenue without oppressing its citizens. To tax part of the internet is a knock, and should be revised as believed by many entrepreneurs. Looking at the funds invested in social media, with an additional tax could be cumbersome.
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Promotion and adverts on social media have been an effective way of customer acquisition and spreading word for a business. Many firms have depended on this methodology but face the music. The decision by these firms and entrepreneurs could surprisingly shutter the economy of the State, unless a consensus can be agreed. The lamentations could be a direct influence and result to the economy of Uganda.
