A tax on users accessing social media sites could put Facebook’s business model for the region in jeopardy

Facebook has warned that it may withhold planned investment in Uganda, due to the country’s social media tax. Uganda’s Daily Monitor news site reported that Facebook’s public policy manager for Africa, Kojo Boakye, had said that his company would be forced to take their investment elsewhere as their business model for the country would be impacted by the recently introduced Shs200 ($0.05) daily social media tax (per user).  

Uganda’s Communications Commission (UCC) has acknowledged that it met with representatives from the social media giant but denied that Facebook had threatened to take its investment elsewhere.

“We talked about social media tax but we did not talk about anything to do with them taking their investments elsewhere. Even in Europe, there is social media tax and they [Facebook] have not taken away their investments,” the UCC’s executive director, Godfrey Mutabazi, told the Daily Monitor.

The Ugandan government recently implemented the Shs200 daily social media tax, payable by users accessing social media apps in the country, in a bid to raise funds for network development. However, Facebook’s business plan for the country relies upon users being able to access its services free of charge.  

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