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.
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.