[kictanet] Telcos regulator seeks to monitor WhatsApp

Tue Nov 6 12:40:09 EAT 2018

WhatsApp generates no revenue from Kenya. 0 KSh.

While I note Ms. Wanjiku’s theory regarding data, there does not yet exist, in any country, a tax regime that extrapolates tax based upon data an online service holds, and a regime that did so would affect many entities, not just WhatsApp. I would be curious to know, however, how exactly tax would be assessed on that basis, and whether it would only apply to data, (and if so, what kind of data, etc.?) or whether it should also apply to any asset that has the potential to be valuable. It seems as well that if we are assessing intangibles, it’s critical to include the tangible economic and social benefits that citizens and governments derive from the use of services like WhatsApp, and the impact of taxing non revenue generating services.

I think the points about safety and the extent to which online platforms can be used to reflect existing societal tensions are critically important. It’s one we have been grappling with as a company, as those who engage with us know very well. We recognize the extent to which our platforms provide voice, especially for communities who do not have access to traditional outlets, so balancing the risks against the benefits while maximizing the space for openness is one of our most pressing problems. Stay tuned for more on this topic!

That said-it’s not at all clear to me what one has to do with the other. What is the connection between a tax on WhatsApp and the latter issue? How would the tax solve that problem? Is the tax meant to be a direct tax on citizens, and thus onerous enough to keep them from using WhatsApp entirely? Or is the tax meant to be a deterrent to Facebook from offering WhatsApp in Kenya? So is this meant to serve as an economic ban on expression, casting a very wide net and affecting all kinds of expression?

Even in the case of Facebook-Facebook does derive some revenue in Kenya. We release revenue figures in our major markets, but not yet in markets across Africa where those figures are a tiny fraction of the global revenue. My team is pushing internally to be able to release these figures in some format across the Continent, because that would greatly inform these conversations. If the goal is to derive tax revenue, understanding the figures will give a much more realistic view, given that the digital ad market across Africa is so small (a fact i would very much like to change, by the way!), Facebook’s revenue share is even smaller, and a tax on that would be very, very far from the windfall governments may be eagerly anticipating.

But again-it’s not clear to me what one has to do with the other, or what purpose is served by conflating them, unless the goal is to reduce all forms of online speech.

On Nov 6, 2018, at 8:09 AM, Barrack Otieno <otieno.barrack at gmail.com<mailto:otieno.barrack at gmail.com>> wrote:

Hi Ebele,

You are best placed to give us guidance on that question. The reason
why this conversation is getting complicated is lack of statistics on
the so called benefits carriers are losing because of OTTs. Might you
be having any statistics on the same. It appears unanimity among
regulators in our region on the issue is growing.

Regards

On 11/6/18, Ebele Okobi via kictanet <kictanet at lists.kictanet.or.ke<mailto:kictanet at lists.kictanet.or.ke>> wrote:
This is a fascinating and very timely conversation. As I’m sure all can
imagine, I have many thoughts. 😁
I do have a question, first-how much revenue does WhatsApp derive from
Kenya?

On Nov 6, 2018, at 7:45 AM, evelyne wanjiku via kictanet
<kictanet at lists.kictanet.or.ke<mailto:kictanet at lists.kictanet.or.ke><mailto:kictanet at lists.kictanet.or.ke>>
wrote:

Dear All,

In suppport of Mr. Patrick Mainas Maina's input.

The government needs to consider taxing the platforms. This is because they
make money from us trade in our data and the revenue genereted benefits
their countries and not ours given that they do not pay taxes here. This has
been considered in Europe. In africa however, no country can apply this
taxes on its own due to our 'economically colonised' position our countries
find ourselves in. This means that the easiest option for our government
becomes the easy route which is taxing the end user. This is
counterproductive especially for those who use social media for productive
activities. Therefore only a united african front would be succesful in
getting these giants to pay up and keep our governments from considering
taxing citizens. It is also important to consider that calls made on
whatsapp, skype,viber cost less. This means that there is revenue reduction
for the companies providing voice services. Considering that these companies
are locally based and pay taxes to our government, why should their revenue
be reduced by services that do not pay taxes to us? I suppose this is the
logic used by countries like the UAE that block the use of whatsapp to make
calls whithin their borders.

As for the ability of whatsapp to cause chaos, this is true and has been
proven and whatsapp itself has acknowlegded this fact in countries like
India and Pakistan. These are countries where fake news and inflammatory
messages delivered mainly through whatsapp have led to chaos that have led
to deaths of many people.  Whatsapp has responded by putting in measures to
ensure that such spread of hate news can be controlled from their end.
Whatsapp also remains open open to suggestions as to how this can be
contolled and is actively leading research in this area.

The question therefore should be, should we leave Whatsapp to be in charge
of what is transfered on their platform and the consequences that follow?
Should government have a role in monitoring how whatsapp is being used for
harmful activities. Overall what is the role of government and the various
platforms in ensuring this platform and others are used responsibly?

Good day to all

On Tuesday, November 6, 2018, 3:44:22 AM GMT+3, Francis Monyango via
kictanet
<kictanet at lists.kictanet.or.ke<mailto:kictanet at lists.kictanet.or.ke><mailto:kictanet at lists.kictanet.or.ke>>
wrote:

Morning Mr Patrick Maina,

You mention how messaging apps facilitate fake news, crime and other things.
You also lay peace,development on a scale versus human rights such as free
speech and privacy.
Sir, it is good to be objective and factual. Last year Kenya had 10 months
of hot politics. Research shows that the Kenyan authorities did not attempt
to control, disrupt or shutdown the internet. Hence this tired line of the
country going into flames because of the internet (messaging apps) doesn't
hold any weight. The number of Kenyan users of these messaging apps and
other factors such as social class of users, bots affect the impact of the
internet in democratic transitions. The broadcast media shut down in January
should tell which communication medium has more impact on the Kenyan
society. 😉

I believe your intention was to state why companies that offer over the top
services should pay taxes here. That is a different argument all together
with a different set of facts unless you are advocating for a blanket over
the top tax to be paid by users to avoid 'spread of gossip and lies' just
like in Uganda.

On Fri, 2 Nov 2018, 13:26 Patrick A. M. Maina via kictanet,
<kictanet at lists.kictanet.or.ke<mailto:kictanet at lists.kictanet.or.ke><mailto:kictanet at lists.kictanet.or.ke>>
wrote:
These messaging apps facilitate fake news, crime, foreign meddling (to
subvert democracy), brainwashing and hate speech on a massive scale. We know
this for a fact.

So as citizens and stakeholders in our country, we need to ask: what do we
value more, is it things that improve peace, stability, economic development
and democracy, OR, is it some utopian, unbounded notion of free speech and
privacy that is disconnected from our contextual reality (e.g. protects
criminals, malicious defamers and violence mongers in equal proportion as
law abiding citizens)?

The companies running these uncontrolled messaging platforms will not be
impacted if our country goes up in flames. They cost governments tons of
money in maintaining internal security (especially during democratic
transitions - sometimes to existential levels) yet they don't pay any
taxes... and mark you, they are *billion dollar* companies! This also means
that funds that ought to have bought, say, medicine to save lives gets
diverted to fix an *imported problem* with no path to holding the parent
company accountable for damage caused.

Gok needs to modernize our tax laws, which currently are based on the
traditional "for profit" enterprise model and thus out of touch with Silicon
Valley's "make losses by design" model. The basic assumption that
entrepreneurship is a profit oriented endeavour does not hold for Silicon
Valley VC subsidized companies. They are designed to operate as loss makers
for decades (but still move *massive* amounts of financial resources at
massive scale). This has the technical effect of *tax avoidance* because
massive profits *are* still being made by the offshore VCs - which denies
governments billions in taxes (despite imposing local burdens as illustrated
above).

A smart government would create modernized laws to tax VC funded Silicon
Valley companies e.g. on the basis of *funding rounds* and *valuations*
because this is their *real* business i.e. its how the investors intend to
make money from day one - and the primary reason they push for perpetual
losses!

There should also be a turnover tax and VAT on online revenue earned in
Kenya by foreign billion dollar internet companies (e.g. advertisement
revenue and appstore revenue), to level the tax playing field for local
businesses. Similar to what other countries like the UK are working on:

https://urldefense.proofpoint.com/v2/url?u=https-3A__www.wired.co.uk_article_facebook-2Duk-2Dtax-2Dbill&d=DwIFaQ&c=5VD0RTtNlTh3ycd41b3MUw&r=ArvepG4_wcNu_X9xi3nb_Xa9WsGLVfmK6mwPdVONOTE&m=4ftjmKibWdxoCB4LQ4lGQm-PG-xSys0r2d0wtrK5LCg&s=ec_MFycetv5Y_WOdUciMsYRvCQl1GHmCHUJ0LEsMzfQ&e=<https://urldefense.proofpoint.com/v2/url?u=https-3A__www.wired.co.uk_article_facebook-2Duk-2Dtax-2Dbill&d=DwMFaQ&c=5VD0RTtNlTh3ycd41b3MUw&r=ArvepG4_wcNu_X9xi3nb_Xa9WsGLVfmK6mwPdVONOTE&m=t74BOKebo761FiLlF3RuH-SUnKGeYceUv24Gp4-Sj5E&s=JpThF3QS5XBibcjJ1Aylg-RSK6s4MaGJtnzz9ILzC9k&e=>

CA will obviously have a hard time monitoring and enforcing though, under
the current traditional framework due to technical barriers (e.g.
encryption) and also due to jurisdictional challenges.

So the other thing that CA really needs to do once the rules are set is to
consider blocking non-compliant foreign apps completely at ISP level
(especially now that political temperatures are cool and people and thinking
clearly). Lets have local startups filling any gaps with copycat apps
China-style.

To be clear, I support free speech and privacy. But I also support peace,
stability, safe neighbourhoods, democracy, sovereignty and economic
predictability!

A delicate balance is needed to maximise the rights of law abiding citizens
while minimising the ability of those with evil intent to exploit basic
rights in order to harm the innocent.

Good day.
Patrick.

On Thursday, November 1, 2018, 11:00:44 PM GMT+3, Grace Githaiga via
kictanet
<kictanet at lists.kictanet.or.ke<mailto:kictanet at lists.kictanet.or.ke><mailto:kictanet at lists.kictanet.or.ke>>
wrote:

Kenya is considering regulating online services such as WhatsApp and Skype
in a radical move that could force the internet-based service providers to
share data with the government.

The Communications Authority of Kenya (CA) is in search of a consultant to
study and determine how the so-called over-the-top services (OTTS) operated
by groups such as Facebook, which runs WhatsApp, and Skype owner Microsoft,
could be regulated.

Read on:
https://urldefense.proofpoint.com/v2/url?u=https-3A__www.nation.co.ke_business_Telcos-2Dregulator-2Dseeks-2Dto-2Dmonitor-2DWhatsApp_996-2D4833020-2Dfn9u7s_index.html&d=DwIFaQ&c=5VD0RTtNlTh3ycd41b3MUw&r=ArvepG4_wcNu_X9xi3nb_Xa9WsGLVfmK6mwPdVONOTE&m=4ftjmKibWdxoCB4LQ4lGQm-PG-xSys0r2d0wtrK5LCg&s=EKPTziEdg0GdTrN35cx4MtOr2VGE3aDDLZPsBUdq6gQ&e=<https://urldefense.proofpoint.com/v2/url?u=https-3A__www.nation.co.ke_business_Telcos-2Dregulator-2Dseeks-2Dto-2Dmonitor-2DWhatsApp_996-2D4833020-2Dfn9u7s_index.html&d=DwMFaQ&c=5VD0RTtNlTh3ycd41b3MUw&r=ArvepG4_wcNu_X9xi3nb_Xa9WsGLVfmK6mwPdVONOTE&m=t74BOKebo761FiLlF3RuH-SUnKGeYceUv24Gp4-Sj5E&s=cndeiTd4wVC4D6EsU4xGNLbSnmIyYUhzbfcRXK3rLjQ&e=>

Best regards

Githaiga, Grace

Co-Convenor
Kenya ICT Action Network (KICTANet)
Twitter:@ggithaiga
Tel: 254722701495
Skype: gracegithaiga
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KICTANetiquette : Adhere to the same standards of acceptable behaviors
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The Kenya ICT Action Network (KICTANet) is a multi-stakeholder platform for
people and institutions interested and involved in ICT policy and
regulation. The network aims to act as a catalyst for reform in the ICT
sector in support of the national aim of ICT enabled growth and
development.

KICTANetiquette : Adhere to the same standards of acceptable behaviors
online that you follow in real life: respect people's times and bandwidth,
share knowledge, don't flame or abuse or personalize, respect privacy, do
not spam, do not market your wares or qualifications.
_______________________________________________
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The Kenya ICT Action Network (KICTANet) is a multi-stakeholder platform for
people and institutions interested and involved in ICT policy and
regulation. The network aims to act as a catalyst for reform in the ICT
sector in support of the national aim of ICT enabled growth and
development.

KICTANetiquette : Adhere to the same standards of acceptable behaviors
online that you follow in real life: respect people's times and bandwidth,
share knowledge, don't flame or abuse or personalize, respect privacy, do
not spam, do not market your wares or qualifications.

--
Barrack O. Otieno
+254721325277
+254733206359
Skype: barrack.otieno
PGP ID: 0x2611D86A
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