today's Pick
Finance rejects sh3000 tax on mobile phone linesPublish Date: May 04, 2014
Finance rejects sh3000 tax on mobile phone lines
  • mail
  • img
newvision

By Mary Karugaba

The Ministry of Finance has rejected a proposal by MPs to impose a user fee of sh3000 on every mobile phone line per year. The amount will also depend on the number of telephone lines one has.


The proposal by MPs on the Parliamentary Finance Committee is intended to streamline tax expenditure, tax policy and administration to raise tax efforts.

The proposal was forwarded to the Ministry of Finance for consideration, come next financial year.

“Most donors have indicated that they are pulling out of the budget support next financial year. So are trying to find possible means of raising our sources of revenues so that the population is not affected in terms of service delivery,” MP Lilly Adong argued.

Without proposing a figure, the MPs also called for a higher levy on night clubs.

But State Minister of Finance Fred Omach rejected the proposal arguing that there were already taxes on phones.

Omach argued that any additional tax would make the service less competitive and more costly.

“They are already a number of charges on mobile phones. The proposal to impose an additional user fee of sh3000 will make the service more costly and less competitive,” he said.

It’s becoming almost a tradition that every financial year, there’s a new tax introduced on mobile phones.

Currently, Ugandan mobile phone users pay a VAT of 18% and excise duty of 12 %. In addition, VAT is levied on handsets and exercise duty of $9 cents on international incoming calls.

The minister of Finance Maria Kiwanuka announced last month during a Caucus meeting at Entebbe that Uganda will be funding the coming year's budget largely from domestic revenue sources by 82 %.

This is in sharp contrast from last year when as much as 25 per-cent of the budget was donor funded. The aid cut follows donors’ concerns following theft of public funds.

Finance commissioner for Tax, Moses Kagwa told Newvision that although the ministry has looked at the proposal, it is not applicable. He doubted whether the MPs first did a research on the impact of the charge on consumers.

Adding that, “I think the proposal was not properly researched to ascertain its impact on consumers.”

Some mobile phone companies could not comment as their spokespersons were either out of the country or not available on weekends.

The statements, comments, or opinions expressed through the use of New Vision Online are those of their respective authors, who are solely responsible for them, and do not necessarily represent the views held by the staff and management of New Vision Online.

New Vision Online reserves the right to moderate, publish or delete a post without warning or consultation with the author.Find out why we moderate comments. For any questions please contact digital@newvision.co.ug

  • mail
  • img
blog comments powered by Disqus
Also In This Section
8 pupils struck dead by lightning in Bushenyi
THE shocking incident happened at 4:45 PM during a simple drizzle, as the pupils were in class for evening lessons at the school...
Makerere agrees to clear staff allowances
Makerere University has agreed to pay staff allowance arrears for the month of May, amounting to sh3.7b....
Govt to pay all salary arrears by September
THE Secretary to the treasury Keith Muhakanizi has promised that all salary arrears for civil servants will be paid by September...
Air Algerie said it lost contact with one of its passenger aircraft nearly an hour after takeoff from Burkina Faso on Thursday bound for Algiers....
URA to collect tax on rented houses, properties
Uganda Revenue Authority has revealed that it will soon begin collecting tax on all rental houses and properties within urban areas....
Doctors remove 232 teeth from boy
Doctors in a hospital in India have removed as many as 232 teeth from the mouth of a 17-year-old boy....
Should government review powers of kings?
Yes
No
Can't Say
follow us
subscribe to our news letter