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The World Bank commends the rising taxes in Uganda!

Yep, the biggest bank and the Bretton Woods Organization called the World Bank has commended the works of President Yoweri Kaguta Museveni and his plans for added taxes. That comes from the similar institution like International Monetary Fund, that ordered Uganda to follow the Structural Adjustment Plan (SAP), therefore, the IMF that fixed more privatization without lacking investments. Are now okaying a higher rising taxes on the Republic’s citizens. This is done, while the economy is not strengthen, but with added external and internal loans. Therefore, the rise of GDP and use of loans, as well as repayments on those loans will sooner or later hurt the economy. Even with the rise of taxes. This will be start of vicious cycle where the state is issuing loans and taxes, while the revenue is used to repay loans, not development. It is basically. But before I go into the deep of the part of the troubling take from the World Bank. Let me just show you quickly the result of the SAP and their advice there.

The studies also make it clear that for SAP-type policies to have a chance of success, certain preconditions are necessary. The public sector had certain social responsibilities that the current framework has pushed it out of but without “a proper handing over” to the private sector. The assumption and hope were that the market would fill the gap left by the retreating state. Clearly this has not happened. There is therefore need for Government either to retain certain key social sectors, or only hand them over to the private sector only when the latter is ready to effectively take them over. Clearly non-profit making aspects of social responsibility cannot and do not get taken over by the private sector. For poverty to be reduced there are certain social responsibilities or even whole sectors that can only effectively be handled by the public sector. Welfare systems and subsidies to farmers in the developed world attest to the need for the retention of these key areas by the public sector. Therefore a policy that proscribes such a hand-over must also ensure that it is done in a verifiable manner so that the private sector can be held to account. Civil society has in the past tried to fill the gap but this has been done in an ad hoc manner” (Kevin Akoyi Makokha – ‘STRUCTURAL ADJUSTMENT PARTICIPATORY REVIEW INITIATIVE (SAPRI) – UGANDA COUNTRY REPORT: A synthesis of the Four SAPRI Studies’ September 2001).

So, when the last system from the World Bank and IMF was introduced the system and the government wasn’t ready to privatize, however, that didn’t stop them or the government to do so. Especially since the funds and loans at the time came with the hitch of doing so. Therefore, the troubles with the privatization and the lacking oversight is also partly because of these programs subsidized by these organizations. That is why the World Bank and IMF should be more careful professing what sort of thing would be genuine and sincere, since they have messed up before. It isn’t only the State House who has messed up, he has gotten help and followed the procedures of these mechanisms. If not, he wouldn’t be able to eat such vast amounts of donor funding in the past. This is well-known, but the lack of oversight, is because of the will of wanting to have control and a say in everything. That is why the letter from the President to Minister of Finance, is the reason for the new levied taxes. So, if you wonder why I have distrust to the World Bank and IMF, it is because of their history and that the public is paying for it, because their impact on the governments for the reasons. That these states should be guinea-pigs for the economy belief of trickling down economics, even as the results has begged differ if it really drips back into the system again. Which it doesn’t because the ones that gets a lot want to keep it and get some more. No dole it out to anyone they can find.

Here is what the World Bank stated today: “In the special section of the Update, the report analyses how Uganda could raise more domestic revenues to support its development. Uganda’s tax system is one of the most modern in the region, but revenue collections, at 14 percent of GDP, are low, and way below its tax potential. Tax avoidance and evasion, partly resulting from generous tax exemptions to investors, weak tax administration, and a large informal sector (now at 80 percent), pose challenges to increasing revenues. Up to 5 percent of GDP is lost annually in tax leakages. Personal income tax contributes roughly 18 percent of GDP compared to up to 40 percent in developed countries. VAT collections amount to 4 percent of GDP, but would rise to 6 percent if there were no exemptions. The report suggests that Uganda could widen its tax base by tapping into areas that are outside the tax net; applying tax instruments correctly and fairly; improving efficiency, transparency and accountability in tax administration; and delivering better public services” (World Bank – ‘Improving Taxation to Finance Uganda’s Development’ 15.05.2018).

Therefore, the World Bank likes the idea of adding more tax on the Mobile Money transactions and the movement of digital cash, as well as on Airtime and other needed things. The ones that hasn’t a bank-account or the ability to fund or even try to get a loans from the banking system. Are okayed by the World Bank as possible targets for taxes. This isn’t transparent, but making it more expensive to be poor, as the rates to transmit and the use mobile money will come. The companies whose use this method will bill the users, they will not take the hit. The same with all the traders and the importers of all the other items that was on the lists of the newly taxed items.

I doubt these new taxes will do any good, it will just be more funds for the elites, the NRM and the President to eat. They are not delivering government services with the trillions of shillings they are using now. They are billing up to their asses and spending rampant, without having the revenue. That is why the rising debts are there. Instead of living frugal and thinking of the future, the NRM and President Museveni are eating like there is no tomorrow!

State House, the President and the Cabinet are eating heavy, they are not delivering, they have no plans to do so. If so, they give locally when needed, but the lack of transparency and accountability, is the reason for missing funds. Recently even the documents from the GAVI Funds was taken from the Ministry of Health. Therefore, a government who cannot be trusted with funds giving donations to help the sick, how can we believe the tax put on Mobile Money will go to roads or teachers?

I doubt that, I am not that naive, this NRM has proven for 32 years, that they are eating and not caring. The World Bank can commend and praise. While I condemn, until they prove that they money are delivered to the schools, that the teachers have their salaries and the civil servants are properly paid. Not just hiring some random Cubans to fix the issues for a short time. That is not how to build a national health care system. That is how to mock the ones you already have. Peace.

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UCC: Lifting of ban on sale and replacement of Sim Cards (08.05.2018)

Internet Censorship: the UCC orders ISPs to block unauthorized Online Media Pages!

On the 19th April 2018, the Uganda Communication Commission (UCC) has sent a letter ordering all Internet Service Providers (ISP), that they are ordered to block “unauthorized” Online Data. That meaning the internet service providers can because of this block pages and news-outlets that isn’t accepted by the Government of Uganda. The National Resistance Movement (NRM) are really having a warfare on the content online. As it has already added taxes on airtime, on mobile money and also now asking to block pages too.

We can surely know that UCC will really struggle to give authorization to media houses, web-pages and content that questions the government. The letter from the government says it very clearly:

The purpose of this letter therefore, is to DIRECT you to IMMEDIATELY SUSPEND the provision of caring services to any Online Data communication service provider (online/Electronic Media News provider) that is not listed above and/or has not presented an authorization certificate or other express clearance from the Uganda Communication Commission” (Letter from Fred Otunnu to ISP – ‘Letter to ISPs on Unauthorized Online Data Communications Service Providers’ 19.04.2018).

They have put a list of 14 companies, where only two are authorized, these are Nile Post News Uganda Limited and China Haijang Online Africa Ltd. There are dozens other which is not, these are in process, the ones known are Chimps Media Ltd and Trumpet Media Ltd. Therefore, many pages are not here. There are dozens of outlets not mentioned or asked for authorization from the UCC.

That the UCC are attacking the online content is clear. The UCC are using their power and force to silence certain media. This is to stop the content the government doesn’t see fit. They are now trying to get all companies, who are using the platforms online to register, to give license and operate. That the UCC are having sleepless nights is evident. As they have already made it hard to register sim-cards lately, also the same government who wants to monitor porn. So this is continuation of the trying to control all online content.

This should be a field day for the Attorneys working Pro-Bono for the Online Content makers as the censorship of the government comes into force. Just like it did, when the UCC had a black-out and VPN during the General Election of 2016. The NRM are really afraid of free-spirited people and the UCC are losing their marbles.

This is to show, that if your not registered at us, we will order the ISPs to not show your page, block your ideas, your content and everything you got through telecommunications. Only way to get through that is using VPN. So the citizens should use VPN to the content from pages and apps that the government has blocked. Peace.

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.

Uganda Communications Commission – Public Notice: “Warning Against Irresponsible Use of Social and Electronic Communication Platforms” (14.09.2017)

The Importance of Mobile Money in Uganda

As the Telecommunication companies like MTN are praised the by the government, the National Resistance Movement have clearly let the economy become addicted and need of the services provided by the different Telecom’s and how the operate as village banks. The further proof of this comes when looking into a study and of the value of Mobile Money. This is done by all of the Cellphone providers in different names, but has the same outcome. Either by sending money to village funds, paying for utilities or even add airtime for a friend. The report conducted and made by Economy Policy Research Center at Makerere University we’re an interesting read. Here is the quotes worth assessing over. The historical backdrop of the vast amounts of trillions shillings in the operations. Shouldn’t surprise anyone, considering that one third of Ugandan citizens use the Mobile Money and average rate of monies sent during a month are 250,000. With the amount of people and amounts traded by Mobile Money, it is a booming business and first trying of banking. But doing it directly by the phone and not at the offices of Standard Charted or Barclays. Just take a look!

After 5 years of operation of mobile money services, the average adoption rate stands at 250,000 persons per month from inception (March 2009) to December 2015. The increase in access to formal financial services, from 28 percent in 2009 to 54 percent in 2013, was partially due to increased access to mobile money 1 See UBOS (2016), “National Population and Housing Census 2014”, Uganda Bureau of Statistics: Kampala services (EPRC 2013). Thirty-five percent of Ugandan adults have a registered mobile money account (Intermedia 2016). An additional 13 percent access services via somebody else’s account, including that of an agent. Mobile money account ownership surpasses the use of both banking and nonbanking financial institutions (Ibid)” (Makwejje & Lakuma, P: 6, 2017).

Finally, mobile money balances are sensitive to monetary policy shocks, while the mobile money values of transactions are not. These results suggest that 1) Mobile money has helped households to substitute liquid and other lumpy assets for financial assets; 2) Mobile money has modest macroeconomic impacts; 3) Mobile money has the potential to improve the effectiveness of the conduct of monetary policy. These results provide additional evidence for policy makers to continue supporting the growth of mobile money platforms. In particular, policy makers should provide the policy and regulatory framework through which mobile money balances can become interest-bearing assets. This will further strengthen the monetary policy transmission mechanism because economic agents will be able to more directly respond to changes in the policy rate” (Makwejje & Lakuma, P: 17-18, 2017).

The authorities clearly has to assess it and look over the Telecom’s Mobile Money operations, as this is important part of transactions and business operations in Uganda. When such vast amounts of people using it and benefits from it. Where their funds turn digital and get traded instead of having dozens of shillings in their pockets as for balance for their trades. Also, gives the ability to send over needed cash up-country or even to family members. Therefore, the structure and the balances of people’s lives can be monitored and shows the interest-bearing assets. The help it has provided the society and also introduce a form of banking institutions to the public. Though this study did not look into the fortunes made by this sort of transactions compared to ordinary banking practices in Uganda. Which, would be interesting expose considering difference of cost for the consumer and Ugandan doing so. Peace.

Reference:

Mawejje, Joseph & Lakuma, Paul C. – ‘MACROECONOMIC EFFECTS OF MOBILE MONEY IN UGANDA’ (June 2017) – Economic Policy Research Centre, Makerere University

Uganda Communication Commission letter to MTN on “MTN Voice and Data Prices Changes” (07.07.2017)

Uganda: NIRA – Clarification on Issues Raised in the “Story Panic as National ID Data Stolen” (26.06.2017)

Third time the Charm? President Museveni postpone Sim-Card Registration to August 2017!

The time line is already is insane, but to put it in perspective. The first deadline for the Sim-Card registration was on 21st April 2017. Also, on the 18th May 2017 the Parliament passed a motion where the Registration we’re possible to postpone it for year after the date of passing. The second deadline, that Minister of ICT Frank Tumwebaze was adamant who said it was the final date and show continue. This was the 19th May, when the state and agencies really authorized it.

After that many has gotten their phones silent and lost their lines, as they even we’re registered, the Uganda Communications Committee (UCC), National Identification and Registration Authority (NIRA) and the Telecommunication Companies as well. The exercise of the weekend has been problematic, as the costumers has flooded the offices and shops because the registration haven’t worked well. The State Authorities and the Companies was not ready.

Therefore, while the President Yoweri Kaguta Museveni is in Juba, South Sudan on the 22nd May 2017. The comes a message on Twitter: “I’ve agreed to this proposal on condition that the new deadline will be respected. SIM card registration will therefore run until 30/8/2017”. Therefore, for the Sim-Card Registration have been postpone again. The citizens and the authorities can continue to work and fix the problems. The companies and the authorities clearly has a vast mission on their hands. They have clearly not succeeding. Therefore, later this one come as well: “Ministry of ICT and other concerned govt agencies are authorized to allow this new window. I ask Ugandans to take this exercise seriously” (Museveni, 22.05.2017). 

Therefore, third time is the charm for the exercise, in the meanwhile you can wonder if the ones who has lost connection. The ones that are disconnected because of the issues with the last deadline on the 19th May 2017. That is why many others lost connection on the 20th May. So now 3 days after deadline, the President shows a leading hand and because of the result. He is overturning the orders of the Minister of ICT Tumwebaze. They are getting another month to the 30th August 2017.

Certainly going from 21st April to 19th May, and today again postponed to 30th August 2017. So the people and citizens are given yet more time, but who needs it more is the Companies and State to figure out how to really do it. Since it seems to be not working now. The are blame-game by the Minister, Parliament, UCC, NIRA and the Telecom Companies.

We can just wonder how this will unfold, the story of the Sim-Card Registration is certainly not over. Not until the President and his minions says so. Peace.

A quick update of the problematic launch of the supposed verified Sim-Cards in Uganda!

Angry Pre-Registered Costumers outside the Airtel Office in Kampala

Today, as its been hours since the deadline of Sim-Card registrations in Uganda, there been reports than many who has registered and had followed the procedure of the Telecom Companies and the State, still got disconnected. The Republic and the Uganda Communication Commission and their employees is clearly overstepping their mandate. As their illegally disconnecting civilians of their communications outlet.

The cellphones that are registered and has done the following registrations should by all means, work like normal and just be in the registry. Since that, alas is not the case. The Ugandans should now march to the UCC building and also flog Minister Frank Tumwebaze who are in-charge of this mess. They are clearly been taken hostage of the exercise. Even the likes of Inspector General of Police Edward Kale Kayihura and his two phone lines is shut, also General Henry Tumukunde has lost his phone. This is clearly evidence that the UCC and Hon. Tumwebaze are incompetent in their works. Also, Lord Mayor of Kampala Erias Lukwago has gotten a silenced phone line.

If your MTN SIM card has been de-activated, please dial *197*3# and enter your National ID Number, followed by Given Name and Surname as they appear on your National ID. For Foreigners, please visit the nearest MTN service centre with your Passport or Refugee ID (issued by the Office of the Prime Minister) Please note: Your SIM card will only be re-activated after NIRA verification” (MTN, 20.05.2017).

There are news that some of the ones who are cut off, as mentioned yesterday the Mobile Money services would still temporarily work. There the subscribers are sending messages together with the money they still have left. As way of sending needed communications between each other. Still, there are millions of numbers and subscribers who wasn’t verified in time, neither had the capacity to be registered. Every Ugandan couldn’t travel to central offices of the NIRA or the Telecom Companies. Therefore, the loss of airtime and the phones. Show’s that the system wasn’t ready for it. Especially, when even central men in the NRM Regime we’re cut off. Opposition leaders was expected, as they are already heavy monitored and just luky for the government who wants to punish the ones not following the program.

There are many who got their NIN and got their verification of their numbers and registered on them. Still, the numbers has been switched off. This shows that the technology and the employees inside the UCC isn’t capable of the services they now has started. People are also worried about their data-bundles and airtime, that they haven’t been able to use before the deadlines even. There are so much money at stake and which has been invested into the Telecom Communication.

This exercise are really in the hand of NIRA, UCC and Hon. Frank Tumwebaze! They really have a lot to do and this tale is not yet over. There will be many subplot and the reasoning could be for getting more money into the Uganda Revenue Authority (URA), as the economy is in distress. Peace.

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