SONA 2020: Duterte wants to reach Betlehem before December…

Well, I cannot manage to look into all the details of the State of the Nation Address. Like I did two years ago, I will address the Telecommunication. Two years ago he promised to do something about the duopoly of Globe and Smart. However, President Rodrigo Duterte have reached that goal, but for whatever reason. There is still just two companies running the game and the others trying to follow their speed.

So, I will show one quote from last year and show what he said this year.

In SONA 2018 he said this:

“My administration remains firm in its resolve to ensure that the country’s telecommunications services are reliable, inexpensive and secure. A draft Terms of Reference for the entry of a new, major industry player is at hand. The terms will be fair, reasonable and comprehensive. It will be inclusive so it will be open to all interested private parties, both foreign and local” (Rodrigo Duterte SONA 2018, 23.07.2018).

This year he said this:

“I call on our [telecommunication] companies to improve their services lest we be forced to take drastic steps to address the less-than-ideal service that the public is getting from you. Alam mo sisingit na lang ako dito. I am… Sometimes we are a government pictured to be weak and incompetent because we cannot really force our mandate. Alam mo itong nagbibigay ng mga public services, you better improve” (…) “If it’s just a question of added capitalization or the infusion of money, go and look for it” (…) “we are a republic, a sovereign country, bear that in mind because the patience of the Filipino people is reaching its limit. At I will be the one to articulate the anger of the Filipino people. And you might not want what I intend to do with you. Kindly improve the services before December. I want to call Jesus Christ to Bethlehem. Better have that line cleared. [applause]” (…) “Tell us now if you cannot really improve on it because I will work by December. I have two years. The next two years will be spent improving the telecommunications of this country without you. I will find a way. I will talk to Congress and find a way how to do it. [applause]” (Rodrigo Duterte SONA 2020, 27.07.2020).

However, there been changes to the duopoly, but with no significant results. That why his focus is on the service and how reliable the telecommunication companies are. This shows that there is no magic wand to this and someone cannot just set up shop to elevate the market.

We have seen that DITO and Mislatel, who were both newcomers to the market have no range or capacity. Maybe, not strong enough ability to sway users from the old ones. As the President only mentions the two old companies. It is still a landscape controlled by Globe and Smart. That is why the President is bugging out about their services.

That’s maybe why he wants the two whose already operating to do it better. These have the ability to get away with it. Since, the customers are there and really it is not abundant of choices. They own the market and therefore, they put the standards and the needed work in. However, they don’t need to push it. In some ways they are alone. Since the people have not changed from their old ones or its to costly to become subscriber to the new services.

Globe and Smart can play this one out. I think Globe dropped a statement quickly after the SONA, but that was an act of defence, which is natural in the circumstances. The President talked about calling Bethlehem ahead of Christmas. I’m sure the Holy Spirit will guide him there. Because, I doubt the service will be revolutionized in the months ahead. Peace.

Mobile Money Tax shortfall: People change behaviour after levying an unfair tax

“Levy on mobile money contributed a deficit of UGX 30.48 billion which can be explained by the fact that high value clients withdraw their funds from agency banking e.g MTN has had a drop of 36 percent in MM transaction values since the introduction of the levy on mobile money” (Uganda Revenue Authority, 06.02.2020).

There is also reported that it has been a 36% drop in Mobile Money Transactions since the enaction of the Exercise Duty in 2018. That means, the added tax on the MM transactions are backfiring. The State isn’t adding revenue, but ensuring that people are finding other ways of moving their money.

This is not shocking, that people change behaviour, when the state makes it more expensive. As the people used these services to send each other money by convenience. Now, one third of the transactions are gone. Meaning, the ones that can change their ways has done that.

The losers are not only the Telecoms, but also the state. As the shortfall of taxes got to be covered elsewhere. As the state had put this into the budgets to cover other state works. This means the targets for domestic revenue wasn’t considering the implications of doing it. As, there wouldn’t be an natural reaction to the consequences to the new taxes.

Instead of increasing the tax base, they are making it smaller and not able to find measures that makes sense. The state has clearly done this without due diligence, neither also configured the stats and the possible behaviour of the public. As their ways gotten more taxed and not considering that they would stop, if they found it to expensive or unreasonable.

The MM tax and the OTT taxes was measures made to tax the digital market-space in the Republic. However, they have both been flawed and also not met their targets, because the public found other ways of doing things.

The ironies about the MM saga is that before the tax, the business of MM was growing. A natural growth and having more transactions every year. Now, that they levied the tax its has a big fall. That is a result of the MM Tax and the public is not having it. Peace.

Opinion: OTT Tax on Data Bundles is like a dual-VAT

“URA Commissioner General Doris Akol told the Finance Committee of Parliament chaired by Henry Musasizi that the controversial OTT Tax will be charged directly on data instead of mobile money to curb the evasion” (NBS Television, 14.01.2020).

I wonder if Doris Akol has thought this through or is winging it? As she see the losses and lack of results, revenue or tax base with the 200 shillings of doom. The whole OTT Tax is to expensive for the public daily. Now, she wants to move it and indirectly tax it instead.

Surely, they will get revenue, but this will make it more expensive to buy data-bundles for the customers and make the packages more viable. VPN and similar networks to circumvent the usage and payments of the daily OTT Tax have beaten the Uganda Revenue Authority (URA). That is why URA does this now.

It is a sign of defiance and civil disobedience. They are trying to patch the hurt. But will this succeed? Will more try to only load data through Wi-Fi networks and wireless networks in general. Not load so much data on the go. Because, people are smart and tries to undercut extra taxes. Especially, when on the data is already paid VAT and the Mobile Company pay their taxes on the profits too.

Therefore, URA and Akol seems fishing. They will raise revenue, but also make the data bundles more expensive and with that stop plenty of people from buying bigger data bundles for surfing online on your smart-phone.

That is just the mere reality. It is a sign, yet again that the OTT is a failed project, who didn’t hit the targets and wasn’t measured right. If it was, the aim and the bargain wouldn’t be like this. That is not happening.

This method is a clever way of adding the costs of data, while charging for service not necessarily used. The OTT Services, which is the reason for why these are charged. Because, the data could be used for other things and therefore, is violating its attempt to make it costly for certain usage on online.

This is again, pushing one story, pushing one tax and trying to tax the public by any means. When the hook doesn’t work, they use the crook. Instead of doing directly, they want to do it indirectly and initially in some way adding a separate VAT on data-bundles masked as OTT Tax. That is really it.

We all know this, URA verify it today. That the only things certain in life is death and taxes. Thanks Akol for reminding us. Peace.

UCC: Suspension of all Sim Registration with the Use of Refugee Cards and Attestation Letters from OPM (07.10.2019)

OTT Tax: Totally failed its supposed revenue targets in 2018!

Today, the Uganda Communication Commission released their annual sector performance report of July 2019. It was really a bit funny look, as the state, the President and all of his handlers said the Over-The-Top Services would create a tax-base and revenue, which would benefit the state. That is why Uganda Revenue Authority (URA) had set up targets to streamline these new taxes.

I will show more of the fun and explain, as the UCC report really shows how malfunction and lack of due diligence hurt. But first a previous calculation, which was stated to the media. To show how much lack of tax-base the OTT had in 2018, as it was implemented in July and keeps pushing to this date.

Look:

Daily Monitor Reports: “Government collected Shs20.5b from social media in the last quarter ended September, according to data obtained from Uganda Revenue Authority. The tax, which was implemented in July, was however, less than the Shs24.9b target that URA had hoped to collect in the period. URA has a monthly target of Shs8.3b. The tax was introduced in the Excise Duty amendments of financial year 2018/19 requiring all social media users to pay Shs200 per day, before accessing certain platforms such as Facebook, Whatsapp and Twitter, among others. Government intends to collect about Shs100b before the end of the 2018/19 financial year” (Christine Kasemiire – ‘OTT raises Shs20b in first quarter, URA fails on targets’ 07.11.2018).

Let’s first do the math, accordingly, as the URA monthly target is 8,3bn shillings in revenue, every single month. A quarter of a Financial Year is 4 months. In today’s UCC report, it shows the numbers for the Q3 and Q4 of 2018. Which means, that states revenue from July-September and October-December in the previous years. By these standards its 8,3bn X3 to get the supposed of any given Q. That is 24,9bn shillings is estimated to earn per quarter.

However, the UCC report states that in the Q3, the revenue was 12,696,558,400 or 12,6bn shillings which is only about half of the anticipated revenue. The final quarter or Q4 isn’t much better:12,952,833,800 or 12,9bn shillings. Of the estimated earnings, the state is nearly able to gain about half of its target. The market and the consumers are not contributing or using the phones as much as they thought. What is striking if you combine the two quarters of revenue is that the state earned approximately 25,5bn shillings, which is sadly just above one quarter estimate of the URA in supposed revenue on this tax. The estimated earnings of the period would be about 49,8bn and this shows the state managed a deficit of about 24,3bn shillings. That is about on quarters earning not happening at all. Thats a giant shortfall of cash and the URA/UCC needs to explain the Ministry of Finance this one, because this a major loss of promised funding for the state.  

This shows how failed this tax is and what a waste of enforcement and making the tax in its first place. This isn’t fun and games, but a way of misusing power to tax people, just because you find something obnoxious. That is how it seems, since the President want to stop the gossip online and such. Stop spreading of information and ensure that poorest cannot afford to get online and use the OTT services. Because, that what this tax does. Peace.

Uganda: Press Statement – Justification of procurement of OTT services for Members of Parliament (16.05.2019)

Total Disconnect: A New Sim-Card Registration Drive by the UCC!

“Those who don’t know history are doomed to repeat it.” – Edmund Burke

The Uganda Communication Commission (UCC) must be a idle force of civil servants, a big bunch of lazy people who has very little to do or even trying to make up work. Because yesterday, a breaking news, which shouldn’t be breaking news is happening again.

The UCC and the Telecom Companies have had several of drives and issues with their SIM-Cards over the last few years. As the companies was even suspended from trading SIM-Cards for a while. That is what has happen. However, it is no returning. The UCC and National Resistance Movement (NRM) likes to toy around with the public and the Telecoms as they are fountains of funds, apparently.

In this spectrum, lets build a timeline before yesterday. The first deadline for registration of SIM-Cards was on 21^st April 2017. Second deadline was on the 19^th May 2017, but that wasn’t enough either. Because of that, it was postponed to the 22^nd May 2017. Alas, that was not the finalization. The registration run continued until 30^th August 2017. This was the final one of that SIM-Card Registration drive. 

The issues in the last go around was between National Identification and Registration Authority (NIRA) with the National ID Number (NIN) activation on the SIM-Cards, as well as the technical difficulties with the UCC and the Telecoms. Therefore, as the OTT Tax is in play, the state should know, whose is who and know who pays the tax or not. The SIM-Cards should be registered in some sort of system already.

That was the issue of 2017. Now the UCC is revising this and reissuing the same sort of activity. For whatever reason they have. As they now did on the 29^th March 2019. Why it is weird, is that the Telecoms had new guidelines selling the SIM-Cards from beginning of August 2017. Therefore, the need shouldn’t be there?

However, this is the latest: “The Uganda Communications Commission (UCC) has directed all telecom companies to verify the identity of their subscribers who hold multiple phone SIM cards” (91.2 Crooze FM, 29.03.2019).

Didn’t the new guidelines of August 2017 set the status clear of the ownership of the SIM-Cards, even if they have dozens of phones. The new guidelines from two years ago should have been proper and established the ownership. Especially, since all the SIM-Cards needs the NIN have to be registered now. Alas, that is apparently not the case.

How, bad can you do a job? Or how lazy are you, since you have to repeat it again? After reviewing and revising it, two years ago and tanking the Telecom Industry, because in the last go-around the state blocked the sale of the SIM-Cards. Therefore, expect something similar in this circus too. Expect it going back and fourth. Suddenly, the President will come with an final order combined with the Minister of ICT Frank Tumwebaze.

That is just how these things goes. The State House has to have a finale say, before the stamp of approval. Than, this saga might be close to end, before it returns to years later with a new modification. Peace.

MTN Uganda Not Subjected to an ISO Raid on Friday 15 February 2019 (16.0.2019)

MTN Uganda Scandal: Why are all of these people deported?

There are speculations going on there as the biggest Telecom Company MTN Uganda Limited have been under fire since the midst of January 2019. This has been shown over the recent month, as the leadership and executives have been deported. By my count since mid of January, there been four people.

The three firsts was addressed like this by MTN Group:

“MTN Uganda has not been officially notified of the grounds for these arrests and deportations and is trying to establish the precise reasons for the deportations. We are understandably concerned about these developments and the wellbeing of all our employees. MTN Uganda is fully committed to respecting and operating within the laws of the country. Notes to the editor: On Saturday, 19 January 2019, the MTN Uganda Chief Marketing Officer, Olivier Prentout, was arrested by police at Entebbe airport upon arrival from a business trip abroad. On the morning of Monday 21 January 2019, the MTN Uganda Head of Sales and Distribution, Annie Bilenge Tabura, was arrested by unidentified security personnel upon arrival at the MTN headquarter offices, in Kololo, Kampala. Subsequently, both Mr Prentout and Mrs Bilenge have been deported from Uganda to their home countries, France and Rwanda respectively. On the 22 January 2019, Elza Muzzolini, Head of Mobile Financial Services was also deported from Uganda. – Issued by MTN Group Regulatory and Corporate Affairs” (MTN Group, 23.01.2019).

Therefore, three people has already been deported, this being Prentout, Tabura and Muzzolini. They have all been banished from the Republic. Today, it has escalated again, as CEO Wim Vanhelleputte, whose also has been interrogated and been questioned by ISO/CMI during January 2019. Was today on the 14^th February 2019 deported to Belgium by the authorities.

Clearly, the state is retaliating, as they are fearing for their safety and the data shedding the company is doing. As there been speculation that the company has had disgruntled staff leaking intelligence to Rwandan Intelligence Service. This has been reported by various of online news-outlets. Therefore, some thinks it is connected to this, that the President and the regime is afraid of this. That is why these people are all deported from the Republic.

It is clear, that there something going on behind the scenes. As the Security Organizations summons, interrogate and deport MTN executives from the Republic. This is happening, as the state are trying to silence the MTN or stop leaked intelligence to Rwanda. We don’t know if that is true or what. But what we do now, is that the Ugandan government and authorities are acting swiftly and retaliates against the high-ranking officials within the Telecom. Peace.

The 200 Shillings of Doom: Tumwebaze mixed messages concerning the Social Media Tax!

We knew that the statements of 2018, as the loyal ICT Minister Frank Tumwebaze hadn’t done his due diligence, as the Ministry of Finance, Planning and Economic Development (MoPED) issued a Social Media Tax last year after President Yoweri Kaguta Museveni wrote a letter to the Ministry of Finance asking for the opportunity to tax this.

That has no been done over the last few months, but as the realization of the effects are coming. The forewarning of CSBAG and others wasn’t listen to. I wrote that it lacked due diligence of the tax in June 2018 and today. As I open Daily Monitor and seeing that Frankie Boy has changed his ways. He has opened his eyes and seeing what some of us saw all along. As the cost of content, the cost of using social media and that this has ensured that it is less viable. Since, its the elites who can use it, but the lower level civil servants cannot afford to be online. That was natural, that the 200 shillings per day would be taken directly of the plate and also evaporate funds for investment within the Republic. It is a negative tax, and therefore, naturally have reverse effect, than what the state promised when they levied it.

Tumwebaze statement in July 2018:

“When Ministry of Finance is borrowing, we, the Parliament and civil society are grilling them for borrowing. But when we say this is a sector that has grown in the economy so let’s get a bit of it, let’s get Shs. 6,000 from every holder of a smartphone consuming OTTs, what production capacity will it stifle?” (…) “Is USD 1,4 too much for a citizen to contribute to tax yet you have money to buy a smartphone, minimumly at Shs. 300,000 that is data enabled, and you load bundles of over shs. 30,000? Logically it doesn’t make sense” (Frank Tumwebaze, 17.07.2018).

Tumwebaze statemetn in January 2019:

“The committee chaired by Annet Nyakecho said Over The Top tax seems to negatively affect the consumption of ICT services and products. In response, ICT Minister, Mr Frank Tumwebaze admitted that the tax is has had adverse effects on the sector. He said they were “hoodwinked” by their counterparts in the Finance Ministry that the introduction of the tax on the basis that it would widen the country’s revenue base” (Ssebuliba, 2019).

ICT Minister Tumwebaze was so positive and thinking this was the future. This was how to widen the tax-base, but instead. It has as expected made the usage of Social Media expensive. Which means also there is lack of funds for the ones operating within the Social Media and making Online Businesses. This is both happening because of the hard hitting taxes on Social Media, but also the Mobile Money Tax. Both taxes has both the Mobile Money Industry and the ICT development, as they are both having less activity and less usage. Which is natural, when the costs are going up.

The ICT Minister should have known this before speaking so warm about it. Any tax are taking money out of the system. The 200 shillings of doom is clear. The state could have listen to the advice, but didn’t open the ears to it.

In June 30 2018, Daily Monitor reported this: “Civil society organisations have accused the government of trying to stifle debate online with this tax, while others like the Civil society Budget Advocacy group CSBAG, say the tax will have a negative impact on a business.” (Hinamundi, 2018).

So, if the ICT Minister Tumwebaze could have known and stopped this. They could have done the right thing and not continued this path. Instead they have hurt the industry, because they are all blindly following the orders of the President. That is what the state did and they levied the 200 shillings of doom, as it was anticipated by anyone else. Than, the authorities itself. Peace.

Reference:

Samuel Ssebuliba – ‘Parliament orders assessment on impact of social media tax’ 18.01.2019, link: https://www.monitor.co.ug/News/National/Parliament-orders-assessment-impact-social-media-tax/688334-4940312-rph8g3z/index.html

Collins Hinamundi – ‘How government will collect the new social media tax’ 30.07.2018, link: https://www.monitor.co.ug/News/National/How-government-will-collect-new-social-media-tax/688334-4639596-juy8n3z/index.html