GOVERNMENT

Taxing The Internet Might Cost Africa’s Economy

Taxing the internet is a new trend that is gaining grounds in Africa. Just in August Zambia approved a tax on internet calls in order to protect large telcos at the expense its citizens.

In July, Uganda also introduced a tax for accessing 60 websites and social media apps, including WhatsApp and Twitter, from mobile phones. There was also an increase in excise duty fees on mobile-money transactions from 10% to 15%, in a bid to reduce capital flight and improve the country’s tax-to-GDP ratio.

Benin has become the latest country to join this growing list. The government passed a decree in late August taxing its citizens for accessing the internet and social-media apps.

According to advocacy group, Internet Sans Frontières (ISF), the directive which was first proposed in July, institutes a fee of 5 CFA francs ($0.008) per megabyte consumed through services like Facebook, WhatsApp, and Twitter. It also introduces a 5% fee, on top of taxes, on texting and calls.

These levies will not only burden the poorest consumers and widen the digital divide, but they will also be “disastrous” for the nation’s nascent digital economy, says ISF’s executive director Julie Owono.

Citizens of Benin and advocates have protested against the decree using the hashtag #Taxepamesmo (“Don’t tax my megabytes”). Also, a petition against the levy on Change.org has garnered nearly 7,000 signatures since it was created less than a week ago.

Digital-rights advocates have voiced their concerns about this trend, they believe that these measures are part of wider moves to silence critics and the vibrant socio-political, cultural, and economic conversations taking place online.

The adoptions of these taxes, they say, could have a costly impact not just on democracy and social cohesion, but on economic growth, innovation, and net neutrality.

But taxing the digital sector might have a negative impact in the long run. Research has already shown that Uganda’s ad hoc fees could cost its economy $750 million in revenue this year alone.

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