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Could Uganda’s social tax have a negative impact on teenage girls savings behaviour?

In July this year, the Government of Uganda imposed a tax on the use of social media. According to the BBC, President Yoweri Museveni pushed for the taxes to boost government revenue and to end “gossip” on WhatsApp, Facebook and Twitter.

Every1Mobile’s Project Manager, Takunda Taderera shares how it has impacted the Trust Girls mobile site.

What is Social media tax?

Users of 60 mobile applications (including Facebook, Instagram, Twitter and importantly for Trust Girls, WhatsApp) are now charged 200 shillings (approximately $.05) per day to access social media platforms.

How has it affected Trust Girls?

We experienced a significant drop in user engagement and site visits for the Trust Girls mobile site, after the change.

The tables below show the difference between May – June 2018 period (before this Social Media tax) and July – August 2018 period (after the Social media tax).

 

Image 1: May – June Key Engagement Stats                        Image 2: July – August Key Engagement Stats                                                                                                                                                            

 

There’s a clear chasm between sessions (site visits) during the May-June period and July-August period. The site experienced an 85% decrease in traffic in the July-August period compared to May-June 2018 period. One can also see a drop in page views between the time periods in question.

How did E1M address this?

It has been very challenging to mitigate the effects of this tax, which hits the Trust Girls demographic especially hard as teenage girls are less likely to have extra money to spend on social media.

  • However, E1M engaged with the Trust Girls digital community via WhatsApp,  informing them that the programme would not be subject to the social media tax.
  • We also advised Finance Trust Bank to send SMSes to communicate with the girls, however, this hasn’t been as effective as using social media as SMSes generally have a very low clickthrough rate.

Taderera says that the project team will continue to track the impact this tax will have on the Trust Girls programme and hope to engage with other stakeholders to find a long-term solution

 

Every1Mobile is a digital services and technology company in Brighton, England, building digital solutions for social change in sub-Saharan Africa. UNCDF is the UN body working to unlock public and private finance for the poor, based in Brussels, Belgium. Finance Trust Bank in Uganda is a private banking institution based in Kampala, putting women at the forefront of its consumer strategy.