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Smile Telecom to pay social media tax for customers

Smile Telecom has committed to pay the Shs 200 daily social media tax for all its subscribers for three months.

The new taxes which came into effect on July 1 at the start of 2018/19 financial year also include the 1 per cent on all mobile money transactions, have caused uproar among Ugandans. With the new tax, social media users are required to pay Shs 200 daily, Shs 1400 weekly or Shs 6,000 monthly.

However, several users have installed virtual private networks (VPN) applications on their devices to circumvent around the internet service providers' blockade and avoid paying the tax. VPN enables internet users to access blocked sites. Government, has in fact asked Uganda Communications Commission (UCC) to ensure that VPN usage is blocked. 

Several internet subscribers are now using VPN to avoid paying the social media tax

"We will pay the new social media tax as required by the Uganda Communication Commission on our customers' behalf for at least three months" a statement from Smile partly states.

The statement further reads that "customers should just continue to purchase and use Smile bundles like it has been in the past and that there are no additional subscription steps to access and enjoy social media services from Smile Telecom". 

Felix Owilo the senior marketing manager at Smile says the company wants its clients to have full access to the internet including all the social media based services.

"As part of our effort to get our customers to move in the same direction, we’ve given them an offer, a special offer for three months. All our customers who are using social media, we’ll cover the cost associated with the period they are on. If somebody uses it for one day, we shall pay for the one day. If they use it everyday for the whole month, we shall pay for the whole month." Owilo said. 

Social media tax affects over 50 platforms including Facebook, Twitter, WhatsApp, Viber, Skype among others.  Owilo noted that Smile opted to pay taxes on behalf of its customers because the new social media tax requires that telecom companies either absorb the costs or extend the burden to the client.

"The provision of the social media tax provision gives two options; either the telecoms absorb the cost or the cost is passed unto the customer. We at Smile we’ve opted to absorb the cost for the time being to allow our customers and future customers to seamlessly transition to these new changes." he said. 

He also said that they decided to take on this initiative, to support a government cause of collecting taxes from social media without causing confusion in the market.

"We’re actually supporting a very good government cause without creating a lot of mayhem in the market. We’re actually complying with the requirement to collect the taxes on behalf of the government. Remember with this tax, it’s two way.

If you’re already on social media on one side, even if you pay, you’re colleague on the other side with whom you want to communicate to should also be active and should have paid. So you’ve got two parties that should be paying for the services. So for our customers, at least we’re taking them half the journey - covering for them at least three months." Owilo added.

It's not unusual for companies to pay such taxes for their customers especially in Europe. Smile claims to have 50,000 subscribers covering 15 districts which include Wakiso, Mukono, Mbarara, Masindi, and Fort portal. Other include Kabale, Gulu, Lira, Soroti, Mbale, Jinja, Tororo, Masaka, Entebbe and Kampala.

Comments

+5 #1 Ssebunnya Fredrick 2018-07-04 10:38
That's a marketing strategy - l think other market players (MTN,Airtel etc) shall also follow the suit so as to retain their market share !
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