Smile Communications Uganda, an internet service provider, revealed Tuesday morning that they would be paying the taxes introduced on social media for their customers.
“We have got you covered!!” said Smile in a statement. “Following the introduction of OTT tax, commonly referred to as ‘Social Media Tax’ that was effected 1st July 2018 by Uganda Revenue Authority (URA), we are pleased to inform you that as a valued customer of Smile, we will pay this new tax on your behalf.”
The ISP went on to inform its customers that they won’t need to provide its customers with a process they need to follow to pay the tax since it will be covered.
“Just continue to purchase and use Smile Bundles like you used to in the past. There is NO need for additional subscription steps to access and enjoy Social Media services from Smile!!” ends the statement.
We have got you covered!!
we will pay this new Social Media Tax on your behalf.
Just continue to purchase and use Smile Bundles like you used to in the past. There is NO need for additional subscription steps to access and enjoy Social Media services from Smile!!
Now you can! pic.twitter.com/OR0W6kGi4Z— Smile Uganda (@SmileComsUG) July 3, 2018
The taxes on OTTS came into effect on July 1, 2018, sparking off an extensive uproar and reflecting, to a certain extent, how the implementing organs were not fully prepared for the show.
First off, a few minutes into midnight on Sunday, mobile money services which were required to pay the taxes crashed. Then, the next day, Godfrey Mutabazi, the executive director of Uganda Communications Commission (UCC) insisted that telcos must block VPNs or tax them after realizing that a considerable number of social media users had resorted to them to dodge the tax. It’s not yet clear how telcos will practically do this, considering how technology keeps evolving.
They might need to spend a lot on infrastructure update to successfully help the government on this, a thing that may not be realistic businesswise.
Is Smile Telecom onto something
Judging from the above, Smile Telecom could have realized what’s coming at them and decided to cover the costs for its customers and recoup the expenses in a more calculated way.
For instance, Smile, for the most part, sells data to companies which buy and consume lots of data; so, they might decide to pay the tax and increase the rate at which the company consumes its data.
Secondly, Smile might decide to wait after customers are happy and appreciate of the service and decide to increase the prices of data bundles.
Also, worth noting: All the telecom companies, apart from Africell, have offered one option, mobile money, for customers to pay the taxes for OTTS. Smile doesn’t have mobile money services. Why telcos are insisting on only mobile money for one to pay the tax, which implies more taxes for the mobile money transactions is also another thing to chew over.
Some customers have already realised it could be a scheme.
You should actually be boycotted for promoting a stupid tax. Everyone knows you will indirectly recover that money. #SocialMediaTax
— Muchope Amooti (@smuchope) July 3, 2018
We were not able to get a comment from Smile Telecom as the known contacts of the company’s spokesman Felix Asimwe were not available.
Some people are, however, optimistic about the idea and, if it works, other telcos could incorporate it.
