Telecommunications, Mobile Money and Cooking-Oil is hit by new taxes in Uganda!

You know there fiscal problems within the Government of Uganda (GoU). The GoU is on the rocks, as they are establishing more loans, more interests to pay and has leveraged their forex exchange, when they are levying today’s amount of new taxes. This is coming as reports of lacking hiring for the Civil Service, The Ministry of Public Service has suspended hiring of new positions in the districts and at the government institutions. This is happening, as the amount of cronies around the President is growing. Therefore, the wastage of funds are in and around the President, who can pledge funds as he wishes and give Presidential Handshakes to whoever he likes or needs. Therefore, today is sad day for transparency, as the state is eating itself, but not taking care of the needed services.

We know the state is poor, when the lacking banking-service and with the need of Mobile Money and Airtime on the Cellphones are getting hit by a tax. This is not social media tax, but is that the subscriber and user of the services, will get a withholding tax of 10% on transactions on Mobile Money and Airtime. This means, every time a Ugandan or someone buys airtime, in the price they are paying an added 10 % on the total price of the usage of minutes of airtime or making the transaction of funds between two funds more costly. This is really hitting the breadwinners and the ones who are servicing mobile money from the towns to villages.

Just to prove to how much the added cost on the Mobile Money is wished, as the withholding tax, they are adding direct also the excise tax on this from 10% to 15%, that means the added is 5% more on each transaction. If that isn’t excessive, just think about the two other taxes as well. Therefore, the state has added three taxes on using the phones. The citizens will have to plan more transactions, as they are more costly and will be less transactions of the amount, since the tax will shave off the amount of shillings sent to the fellow they wanted to give needed money through these services.

They are adding even more on every telecommunication services, not just the hit of withholding tax on it, but they are even adding an excise duty on it as well, meaning there are two pieces of taxes put on the same services, but at different times. Making the expenses of using the cellphones, hitting the roof and the value of the airtime dwindles, as you are paying more tax on each minute use. This excise duty is put on the level of 12% as well. So, expect the prices on airtime to rocket, as this hit both the agents to pay more tax on each, and also the cost of actually calling too. This is funds that the Telecommunication Companies will get back from the consumer, meaning citizens will pay more being in touch.

As they continue to give price hikes on necessities, they are putting a levy of 200shs on each liter of cooking oil, this meanings the price for making rollex or banana-pancakes will go up. Since before you buy the eggs and the flour to make your dish. You will pay more for each bottle, while the state gets simple taxation on this single item. It might seems pointless, but all fried foods will be more costly to make and a Samosa will cost more to make, therefore, expect a price hike on the hawkers foods in any stage where you waiting.

These are just some of the measures done by the state, there are several more, but this is really hitting the average citizen usage of phones and also cooking. This are just two items on a long lists of new taxes put on the people. Clearly, the state see the need for spikes of prices, growing inflation and lack of monetary control to come, as the chickens come to roost and the costs of debt services is hitting the fan.

The ones that has to pay for that, isn’t the elite, but all of the citizens who spends time outside their homes and buys into services. Which, means all of them. Peace.

The Creations of districts: Shows growing expenditure, not only at Parliament, but also at local level!

Local governments are supposed to be financed with 30 per cent of the national budget but this has never been possible; sometimes it is as low as 15 per cent. This continues to stifle service delivery,” said Mr Cuthbert Felix Esoku, the Mbarara District chief administrative officer” (Mukombozi, Rajab – ‘Government lacks political will to improve district funding, say local leaders’ 09.11.2017, Daily Monitor).

Sometimes I wonder, if the government understand what it does, or if the sins of the 9th Parliament is hitting the 10th Parliament hard. Also, that the President is lax on caring, because he wants his cronies well off, just like former Prime Ministers and Vice-Presidents are getting 20 million Shillings Yearly as a Pensions, without the perks they are getting too. Therefore, the silence from them, as they are highly paid without doing anything for the NRM. Their ills and the growing Local Government is costing. Not only in Parliament, but in the districts itself. Today, the issues of Parliament is hurting, but none is addressing the local issues. Which is the reason for the lack of money and needed supplementary funds for the Members of Parliament (MP). Take a look!

Parliament is seeking Shs 3.3 billion for the emoluments of twelve more legislators starting July 1, 2018. According to the parliamentary service commission, the number of MPs will increase from 453 to 465 at the start of the of 2018/2019 financial year when new districts and municipalities come into effect” (URN – ‘ Parliament seeks Shs 3bn for 12 new legislators’ 22.04.2018, The Observer).

I am amazed about the amounts of districts and the rise of cost. This not only the share Members of Parliament, the lack of space for their seats and the possible rebuilding of the Chambers. Because the amounts of MPs wasn’t built for this amount of people at the same time. Therefore, the Parliament needs funds and budgets to fit. That says the foolishness of the new districts in that regard alone.

We know, by recent news that the state cannot afford to hire civil servants to Local Government that as is, and that is without the new enclaves or districts created by the state. That is not just the salary of the MPs whose recently elected, while the Electoral Commission are stretched in getting the by-elections and the MPs their seats. That is just beginning, as the growing debt and the interest are growing. While the Parliament is lacking space and the infrastructure and the local hires are not there.

That the state has under President Yoweri Kaguta Museveni gone from 33 districts in 1986 to about 136/7 after 1st July 2019. Which was ushered in July 2015, a year before the General Election 2016 and fitted the needs of the National Resistance Movement and keep up with pledges made by the President. So every single town is a District and none is inter-connected it seems. Every hill and top is Sub-County. Just the way NRM Regime like it.

In 2017, the Parliament gave a tender about 260 Billion Shillings to ROKO to build a 500 seat size of chambers there. So the payments and monies are there, when needed, as the state can configure and find money for this. But they are usually lacking funds for the civil servants and for the ones serving in public offices in low-level positions. Even not hiring the needed ones in the districts, schools and so on, as there are thousands of jobs that the Ministry of Public Service is not allowed to hire by direction of Keith Muhakanizi, the Secretary of Treasury said there was no funds for that.

But now, suddenly, just like there is funds to athletes, there are funds for new MPs. This is happening as the new possible Social Media tax and also the Tax on Mobile Money. So not like they don’t have projects to use it on. It is all of them districts that needs mansions for District Police Commanders and Residential District Commanders, who all need a palace to live in. Also the need for a local government building and facilities, they cannot run the district from a shack. If that means all citizens has to bleed, that is okay, they deserve this cronyism.

This is the pile of bills made by the amounts of districts, the running costs isn’t just the 3 billions supplementary for the MPs there, it is the new civil servants, buildings and develop these districts. Unless, they want to be ghosts on the paper like schools, teachers, students, refugees, roads and development projects in general.

So, if you don’t see the issues I see, then your either in on it or your just thinking. Its a lost cause, because the President is ushering it in and sanctioning it. This to feed off his cronies and making sure they get jobs locally. Instead of building good districts, he has just chopped them in two or made new ones. So the development and local changes can be made right before elections. That to secure his own candidates for the Parliament too. So for the President its a win-win.

Nevertheless, this has clearly stretched the budgets, the need for public officers and civil servants, as well as more appointed local leaderships. All of these needs salaries and pensions, which means the grows and becomes more expensive with the growth of expenses like these. This is happening at a rate and time, as the growing debt and interest rates are rising. Therefore, the negative affects of it all needs to be put in perspective. However, that is not interesting to the NRM as they cannot question their king, without insulting his intelligence or his will of staying there. That is shown too…

Well, this was a bleak and sad story, but needed this perspective, since the cost of 136/137 districts should be discussed, not only the cost of MPs and the cost of building a new chamber at the Parliament. Peace.

Uganda Bankers’ Association: Position of Financial Institutions under the UBA Umbrella Notices Recieved from URA to Obtain Information of all Account Holders (08.04.2018)

Prof. Tumusiime-Mutebile: Bank of Uganda is Soundly Managed (05.04.2018)

President Museveni proposes a Social Media Tax: Good luck enforcing it!

I know that President Yoweri Kaguta Museveni will not go door-to-door getting the cash-in, he will not issue the tax directly or levy the tax on each single individual who is on Social Media, but his letter to Minister of Finance, Planning and Economic Development Matia Kasaija on the 12th March 2018 on “Re: Lack of Seriousness in Tax Collection”. That is the letter that propose to task some taxes on Twitter, Facebook and WhatsApp. Where every single user of these are paying 100 shillings each per day. That is specialized task to gain huge revenues for the state. This is really to secure more funds to the Republic.

That President Museveni hasn’t thought this true, but will he get the names, does his CMI knows all who has WhatsApp, Facebook and Twitter, do they know how much these are used? Will these taxes be put when they are used and not levied the other days. The Uganda Revenue Authority, needs a mandate for this sort of tax, because this is also the privacy, since these are programs that people download on their free will. Not all have these. Is his plan to pay a 100 shillings for each days, so if you have three apps, will you pay 300 shillings per day?

This sort of ideas opens wormholes, is it that the Republic of Uganda, will through the Uganda Communications Commission (UCC), National Identification and Registration Authority (NIRA), Uganda Revenue Authority (URA), Ministry of Finance, Planning and Economic Development (MoFPED) and Ministry of Information and Communications Technology (MICT). Should all be involved in finding he ways to levy these sort of things. Should they get all the companies who are servicing these apps to put a pay-wall that you have to register to pay each day you enter? Is that the sort of plan?

That the MICT, MoFPED, URA, NIRA and UCC are sending letters to Facebook, Google, Apple, WhatsApp, Twitter and so on. So they can figure out how to get this tax. Because it needs a technical feature, unless the CMI and Intelligence at SIU Kireka has it all. Unless, the state has gathered it all in secrecy or if the Telecom companies has this registered in their records.

You can wonder, if the MTN, Airtel or any of them has been considered here, as they are paying taxes on all the added value of the airtime, the trade of the phones. That the state is trying to do this, is to force a tax, that should be taken on directly every phone-call and SMS. That your paying 5 shillings for picking the phone and 10 shillings for receiving. Also 5 shillings for every SMS and 10 for MMS. That is the nonsense of this.

But I don’t think the President has considered the implications, neither the invading of the privacy, unless he wants to order the companies to put a pay-wall for using social media, that will have to subtracted by credit-card, mobile-money or out of the air-time. That is how it is supposed to be. But than, this is a grand-old man. Whose not that sophisticated or smart enough to understand, what he is implicating. Unless, someone is trespassing on his lawn or going to close to his cows.

This idea should be scrapped in the country, that has struggled to register the Sim-Cards and have them registered correctly. That all Social Media should be monitored and levied tax on is insane, but fits the Modus Operandi of Museveni.

Ready, Set and Bogus. Peace.

Uganda Communications Commission: Clarification on Sim Swaps/Sim Replacements (27.03.2018)

Bank of Uganda’s Fresh report spells fear of the growing levels of debt!

This isn’t breaking news, this just facts at this point. The growth of debt is becoming a danger for the economy in Uganda. Because of the overspending and lack of donors to pledge for the needed government services, the bloated amounts of local government and the rampant cronyism. Is all combined making sure the extent of the economy gets hit, while the Uganda Revenue Authority, doesn’t have enough levies or enough taxes to gain enough for the shortfall of cash. The deficit is founded on loans, while the government are still paying interests and growing the debt ratio at a scale that is not healthy for the economy. Even if there is a future possible oil-revenue, it still has to become massive, to repay the debts of yesterday. When the amount of GDP goes to repaying and higher rates on the new loans. This is how to step-by-step killing the economy, by circling and re-issuing new debt, to pay off the old debt. Sooner or later, you need a scheme to fix it and start a Ponzi scheme to fix the economy. That is why there are ghost refugees and ghost projects to fix funding for the failing state.

Just take a look:

The provisional total public debt stock (at nominal value) as at end December 2017 stood at Shs. 37.9 trillion, representing an increase of 9.4 per cent relative to June 2017. This growth in the stock of public debt was mainly on account of a 12.2 per cent growth in public external debt (in Shillings terms), which continues to have the dominant share of 66.3 per cent of total public debt. In December 2017, external and domestic debt amounted to Shs. 25.1 trillion and Shs. 12.8 trillion, respectively, which is an increase of 12.2 per cent and 4.2 per cent, respectively, compared to June 2017.

The provisional stock of public external debt disbursed and outstanding stood at USD 6,902.7 million as at end December 2017, representing an increase of 10.8 per cent from June 2017 compared to an increase of 24.6 per cent in the corresponding period a year ago. The total external debt exposure (debt disbursed and outstanding and debt committed but undisbursed) amounted to USD 11,690.6 million as at end December 2017” (BoU, P: 16, 2018).

The present value of total public debt as a ratio of GDP stood at 28.1 per cent as at the end of December 2017, which is lower than the PDMF benchmark of 50 per cent. However, including committed but undisbursed loans, the ratio of total public debt to GDP is closer to the threshold. This poses a risk of higher exposure or failure to meet external debt obligations in case of exchange rate volatility and slow growth in exports. In addition, high debt may become a drag on economic growth by discouraging public investment due to the high debt service costs” (BoU, P: 17, 2018).

This sort of report should worry anyone who cares about the future, the growing debt is a bad sign. It is a sign that the National Resistance Movement and President Yoweri Kaguta Museveni, is putting the future at risk, because he wants to eat right now. Instead of balancing the budgets or trying to find ways to get fresh revenue for the shortfalls and deficits, instead he is borrowing for everything and with the lack of transparency, the funds are embezzled and gone in the wind. Therefore, the state can often borrow for something that only exists on paper. Which is even worse, because they are not delivering anything else than growing debt like it is a gifts. That they will not pay interests and pay it off sooner or later.

The amount of loans should worry, it really should. This sort of reports should shatter the Parliament, should reshape the government and should make the Finance Minister Matia Kasaija and Treasury Secretary Keith Muhakanizi, wish their were on a peaceful island drinking umbrella-drinks, while far away living on their pensions, and hope they are not getting a Q&A at the Plenary Session. Since this is damning and beginning of troubles ahead. Just not knowing how damaging it can be. Peace.

Reference:

Bank of Uganda (BoU) – State of Economy – March 2018

Uganda Communications Commission – Public Notice on Scratch Cards (24.03.2018)

MTN Uganda – “Announcement: New Guidelines on Selling MTN Sim Cards” (08.03.2018)

Minister Kasaija are borrowing more money, because of a shortfall he say!

Uganda is your country. When you’re writing a story, ask yourself if it is going to build or destroy Uganda. Is it going to bring peace or anarchy?” (…) “I’m advising my good friends of New Vision that for the good of your country, do not publish stories that are not true. My telephone number is known by everyone, call me. If I can’t respond then wait, because I’m also a busy man but I’ll respond. Let me repeat, for the good of your country, please don’t publish false stories” – Matia Kasaija, Minster of Finance.

I know, some people get touchy when stories comes out. Out of the woodworks suddenly the questions arise and people are thinking? Why? Why does the state borrow even more funds, is it needed even? How come the State, who is already borrowing heavy sums of money from all sort of bilateral, multi-national banking institutions suddenly need to borrow money from domestic sources. That question should be asked and need to questioned. Since the reality of the matter, isn’t what it is used to, since this government cannot even explain where the PTA Loans went. It is amazing how things are going, that the State can take up loans like this after already no accountability on the previous ones. The same minister is already questioned for the loans done with PTA loans, who knows what else that has gone missing, as the GAVI and CHOGM Funds of the past suddenly vanished into thin air, hard not imagine that this could happen again.

“Yesterday, Monday 19th February 2018 the New Vision Newspaper front page lead headline stated that Government is borrowing UShs. 700 Billion to pay salaries for public servants. I would like to inform the General Public that this story was an exaggeration of the proposed borrowing that I laid before Parliament. We borrow to a large extent to finance capital development and production. In my letter dated 9th February 2018; I submitted a proposal to Parliament seeking authority from the House, in accordance with the requirements of Article 159 of the Constitution of the Republic of Uganda, to borrow additional Ushs 736 Billion from the domestic financial market to finance the Budget for FY 2017/18” (Uganda Media Centre, 2018).

This money will go to “development and production”. We can wonder where that is, if it is the bills of Gen. Salim Selah hotels as the seedlings delivered by, Operation Wealth Creation (OWC) is lack-lustre at best. Who knows where all the pooled monies for NAADS are going, but clearly not all of it is not going to micro-economic benefits for the society.

Shortfall is clearly there and the weak economy, that has been juiced up and run like a drunk seaman. That is why as the last end of bottle of beer is there and the need to go down to the bar and buy more brew on credit. That is the ordeal of the day. It is not a narration by Morgan Freeman and a beautiful tale of forgiveness and hope. No, it is a tragic day of even more debt, this time internally and used by the state. Since they are embezzling and taking away funds from the public. This will create more pressure for liquidity in the banks who borrows to the state, as this is taking from their own reserves to bailout the state. Eventually, the state has to find other funds to pay back the banks.

It doesn’t take a wise to understand, that adding more debt, while growing debt and also paying interests is a vicious cycle. They are recycling loans and adding more interests and more debt to be repaid in due time. We can just pound on that and wonder why the state hasn’t made a budget that is within the reach of the economy, but the government isn’t like that. They are spending money like there are no tomorrow. Having one beer, another one and another one. Now it’s drunk and don’t want to lose the edge, the steam and the good feeling of tipsy. The state doesn’t want to get the hangover and deal with the cure. They just want to shug more bottles and hope no one notice. Peace.

Reference:

Uganda Media Centre – ‘Statement on the proposed government borrowing of UGX 700 billion #UGCabinetResolutions’ (20.02.2018) link: https://ugandamediacentreblog.wordpress.com/2018/02/20/statement-on-the-proposed-government-borrowing-of-ugx-700-billion-ugcabinetresolutions/