Since March 2017, the Uganda Telecom Limited (UTL) have been struggling, it started even before then, but at that time. The state started to intervene, by the next month in April 2017. The state had already put the company under provincial ownership. Meaning, that the state took it over and has tried to find new ownership of this company. Something it hasn’t succeeded in. This all happened because of the Libyan crisis in 2011 and the frozen accounts of Libya Post Telecommunications & IT Company (LPTIC), which had a majority ownership in the UTL until that point. However, they didn’t get all out before March 2017. Even as there was a set-up a new board in the Company in fall of 2016. Even, with all of this, the UTL continues to live, but by mere state injections and not because it is viable for business.
Even after a year in May 2018, the Cabinet announced that they were looking for new owners, alas, meaning that the state wouldn’t have the major stake in the company. Why I am saying all this? Well, the news this week that Minister Evelyn Anite and government sources states this:
“The source added that the government had created incentives to make the company more attractive. They include managing the backbone, wiping all the liabilities off the balance sheet, and that the government would take responsibility for the pension liability of more than Shs 30 billion to former UTL employees. Other liabilities that the government would take care of include the regulator’s fees and taxes. “All these wipe off the balance sheet and handed it [UTL] to you, clearly you can start from a clean slate.” the source said” (URN – ‘Gov’t offers to pay Shs 500bn UTL liabilities’ 20.04.2019, link: https://observer.ug/news/headlines/60467-gov-t-offers-to-pay-shs-500bn-utl-liabilities).
With this in mind, the state would clean the slate of the company, an embattled one who is fighting in a competitive market. Where it is directly competing against the mighty MTN and Airtel. Therefore, the UTL needs an decent upgrade, as it has been in a stalemate for years now. Where the lack of investment in the company and the debt it have already.
We can clearly see that the company is not so viable. The lack of interest and value is shown as the President even needed to direct the state ministries to use the UTL Internet Services and mobile phone services by a letter in January 2018. That is why, a year after that, the government sources are trying to connect it even more and juice it up. Even if it has little to offer.
The UTL doesn’t look solid or offering something of strong value for a buyer. As it has a strong competition and they are on point when concerning the telecom infrastructure, which the UTL haven’t the ability to afford to do or invest in. Therefore, the next owner has to pick up, where the Libyan owners left off. Since, the state haven’t done anything else, than keeping it alive. Peace.
“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 21st April 2017. Second deadline was on the 19th May 2017, but that wasn’t enough either. Because of that, it was postponed to the 22nd May 2017. Alas, that was not the finalization. The registration run continued until 30th 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 29th 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.
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 14th 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.
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.
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
I wonder if Yoweri Kaguta Museveni ever listens to himself and his own advice. Because his own words so often are compelling to his own activity. Just like yesterday, he continues his rants of wisdom. This is something from the 32 years regime, who continues to pursuit their own game. It is nothing, that seems to stop them in their ways. They are just collecting whatever they can, even when there is no proof of doing any good by doing it. They are pushing taxes on the public, without giving service delivery back. They are just taxing them and making life harder.
President Museveni also spoke on surveillance of the Telecommunication Industry and use of Cellphone. Because he believes that the Companies are not paying their fair share. He is really proving his dictating ways and his micro-managing to the next level. He has the answers for more taxation and the answers to solve the lack of funds for the state reserves. Take a look!
“The third measure is electronic monitoring of telephone calls because the telecoms have been under-declaring their revenues. URA was depending on figures provided by the companies instead of independently monitoring them” (Museveni, 23.11.2018).
“Fourth, we must electronically monitor all money transfers. URA and BoU should do this. We recently started a tax on mobile money and social media. The mobile money tax was good because we had a large portion of people who are in non-monetary GDP.” (Museveni, 23.11.2018).
What is more worrying is that he wants to practically surveillance of the telecom industry. He wants to follow the airtime and cellphones, to check if the Telecommunication Companies are underwriting and lying on the usage of the telephone-services. This is furthering the opportunity of the state to follow and monitor the public, they will have the excuse to do so, by checking if the Airtel, MTN or other companies are telling the truth.
The last piece is that the President says the Mobile Money tax was positive, because it shown the amount of people who living in a non-monetary society. That the Mobile Money Tax are showing to what extent the public are living without bank-accounts and by direct cash services. That is why the Mobile Money has been important all over Uganda, because it has given people ability to pay over another platform, which wasn’t costly, but opening to transfer from instance family members in Kampala to the ones up-country.
Therefore, the Mobile Money tax has made it more costly and more of a bother. This hasn’t made it better, but made life harder. However, the President doesn’t see the good for the people, but the good for his spending in the State House. Which has grown by adding more taxes and not checking the consequences of doing so. Peace.
The Over The Top Services Tax and Social Media Tax can only be said as utter embarrassment by the National Resistance Movement (NRM). There are enough things to know this would happen, as the plan was for getting the revenue, but not thinking the consequences of the taxes. That is why, today’s revelations about the levied taxes isn’t that surprising.
Without due-diligence, it is hard to know the effects and the means for why it is put. It seems like the President and the NRM had a dream of cash-flowing into the Consolidation Fund without any consequences, but apparently it does. And when you add taxes on things, people either use less or plan more effortlessly to circumvent this added cost on their daily lives.
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).
While it is a few days ago, that the MTN Uganda promised the 24 hours since paying tax, that the tax would last from the time of payment of the tax until the time is spent. Instead of how it has been, until the new day coming. Meaning, that often you would only get half-a-day with the Social Media, as the taxation would start again, when the clock turns 00:01.
That is why this was news to: “Airtel Uganda and other telecom service providers have announced a fundamental change in the Over the Top excise duty imposed on social media following a directive from Uganda Communications Commission, the telecommunications regulatory body in Uganda. Since its introduction in July 2018, the tax commonly known as OTT or social media tax, was only valid up to midnight of the payment date for daily users. With the recent changes, daily subscribers can now enjoy internet services for a complete 24 hours – right up to the time that they subscribed 24 hours earlier. This also applies to the weekly and monthly users who can also enjoy services until the time that they subscribed” Brian Emorut – ‘Social Media tax validity to now last 24 hours’ 06.11.2018 – Guide 2 Uganda).
So now, Airtel and MTN has changed their pattern of getting the OTT tax. While URA is struggling to met the supposed the quota. This shows that the state had not considered all implications to the levied taxes. The NRM clearly didn’t envision, either the use of VPN and also that people cannot afford it. Because it is barrier to be even using the social media after the taxes.
Surely, the 24 hours usage and the lack of collection. That the Telecoms and the Mobile Money outlets has been pushed and lost revenue is certain. As the data-bundles and Air-Time had to be corrected from July on and also now the barrier for OTTs are changing again. This is surely showing that the Telecoms and the Republic wasn’t prepared for this, but doing it on orders from the President. Peace.