Truth behind Zambia’s social media tax

By Lynsey Chutel

Following the examples of Uganda and Tanzania, Zambia announced in August that it plans to implement an internet tax. President Edgar Lungu (pictured)’s government aims to tax over-the-top services like WhatsApp, Facebook Messenger, and Viber.
Activists argued that it would shrink public discourse, confirming fears that Lungu’s government was hostile to critics. The information minister, in turn, said the tax would secure jobs by protecting large telcos from unregulated competition. In the weeks since, however, the fallout in Zambia has revealed that the proposed tax is more about a debt-ridden government trying to find ways to raise funds in a cash-strapped country.
“It’s like you’re asking people to pay taxes for freedom of expression,” says Peter Mwanangombe, a project coordinator for the internet rights group Bloggers of Zambia. The group has organized small protests against the planned tax, such as a slam poetry evening in Lusaka, to highlight the importance of unhindered expression.

Bloggers of Zambia is also appealing to the Media Institute of Southern Africa and plan to connect with like-minded movements around the region, with the hope that the Southern African Development Community and the African Union will intervene.
“It’s really confusing and doesn’t make sense,” Mwanangombe told Quartz. “It’s clearly an issue of raising a bit of money through taxes.”
A tax of 30 ngwe (3 cents) on 2 million users could lead to a profit of around 600,000 kwacha (nearly $50,000) a day, he explains. For debt-ridden Zambia, the revenue from the social media tax sounds like a lot. Last year, after paying off debts and public servants’ salaries, Zambia only had 23% left of domestic revenue, according to a report by the Center for Trade Policy and Development.
“Its just desperation,” said Tevor Simumba, an economist with the center. “The government sees it as a way to collect more revenue and reduce the usage of over the top services.”
Simumba also believes the limiting of over-the-top services has little to do with curtailing freedom of speech. The tax would hopefully direct more traffic toward traditional mobile phone calls, supplied by telcos like the state-owned Zamtel. The state also has to pay off a loan that saw Chinese mobile multinational Huawei build new infrastructure, says Simumba, who has been investigating the Zambian government’s opaque financing from China.

Zambia’s revenue collection plan doesn’t seem all that profitable on closer inspection. The regulator’s own research shows, only 1.3 million Zambians had smartphones, which is about 8% of the population. The projected income doesn’t justify the cost of implementing the tax and ignores losses incurred by small businesses who rely on OTT services to reach customers and ordinary citizens who may simply stop using the services, say economists. The Center for Trade Policy and Development did the math and found that the state’s own figures that 80% of Zambians are using apps like WhatsApp, Skype, and Viber to make calls didn’t add up.
An earlier statement from the ministry of communications and transport estimated that the number of mobile internet users had increased to 6.1 million in 2015, with mobile phone penetration reaching 74.9% in a population of 16.6 million. The ministry’s figures contradict the state communication agency’s figures, which in turn contradict those of proponents of this tax—a hint that the government’s planned policy may be a knee-jerk reaction to empty state coffers.
Benin was set to institute a similar tax this September, passing a decree in August that would also see over-the-top services taxed. The tax was enforced for all of three days before it was repealed, following peaceful protests and the use of VPN’s.
The tax was suspended after president Patrice Talon reportedly met with his finance minister and local telco representatives. No formal reason was given for the cancellation, but given that only 500,000 people in a country of more than 10,8 million people would have been affected by the 5 CFA francs ($0.008) per megabyte tax, it’s possible that projected revenue just didn’t add up, as would be the case in Zambia.

Unlike in Benin though, Zambians have not come out in their numbers to protest the tax. The anger the tax has raised has been diluted by confusion over how exactly it will be enacted if it all. Lungu has been known to pass laws, only to scrap them a short while later. Despite the potentially dire consequences to small businesses and ordinary citizens, the outcry is muted as it becomes clear that this is about fundraising rather than real policies. – Quartz

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