In Uganda, people who use social media platforms and/or who utilise mobile money services to transact will incur a fee – 1% on mobile money transactions and Sh200 (US$0/05) daily for social media.
This is according to the Excise Duty Amendment Bill which local lawmakers have passed and which comes into effect on 1 July 2018.
While those who use mobile money services will be taxed for receiving money, making payments, cash withdrawals and payments, it is unclear how authorities will enforce the law on social media users.
There is speculation that mobile phone operators will impose a tax on each SIM card used to access social media, but this has not been confirmed.
There is currently no mechanism in place to assist in distinguishing private social media use and that by businesses, for example.
Despite the uncertainty, the government believes it will be able to collect an annual amount of US$108 million for the national treasury.
David Bahati, State Minister for Finance, told parliament yesterday that the taxes are required to help the country pay off its growing national debt.
Media reports claim that only 17 million of the almost 24 million mobile phone users in the country use the internet.
Bahati said, "The people we are taxing need free education, free medical care and all services. We know that people have to communicate and so the new law is not meant to stop anyone from communicating using whatever means including social media."
Uganda's President Yoweri Museveni has encouraged the drafting and introduction of the law as a means of regulating social media, which he says "encourages gossip among Ugandans."
In March, Museveni wrote a letter to the Finance minister insisting that the revenue collected by social media tax would help the country cope with the consequences of gossip.
According to the Ugandan Communications Commission (UCC), in the 2016-2017 financial year, the telecom sector contributed Sh523 million (US$142 million) to the national tax revenue.
Opposition lawmakers like Robert Kyaggulani have cast doubt over the move saying it amounted to double taxation.
Kyaggulani argued that social media is being accessed through airtime that is already taxed.
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