Business
MPs want taxes on telecom firms cut
Publish Date: May 15, 2014
MPs want taxes on telecom firms cut
Agago County MP, John Amos Okot
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By Umaru Kashaka     
 
Legislators on the budget committee of Parliament have asked the Ministry of Finance to urgently reduce the high taxes levied on the telecom companies in order to bring the calling rates in the country down.
 
While discussing their medium term macroeconomic plan and programmes for social and economic development for fiscal years 2014/15-2018/19 on Wednesday, the committee said high taxes on calls force operators to increase tariffs, in the end affecting customers and traders in the country.
 
“Although government needs the money from taxes to facilitate development, Uganda’s taxes on telecom companies are the highest in the region and we feel these taxes are regressive because they impose a greater burden on the poor than the rich,” said the Agago County MP, Amos Okot.
 
The committee said that although it was informed that the penalties to address the issue of quality of service will be stipulated in the regulations of the Uganda Communications Commission (UCC) Act 2013 that will be brought to Parliament soon, mobile operators continue to transfer high taxes charged by government to clients in the form of increased call rates.
 
“The committee noted that consumers continue to experience problems of dropped calls and unsolicited message from telecom companies that are charged off the consumer’s airtime. 
 
The high taxes are mainly manifested in the incoming international calls terminating in Uganda,” the Ntenjeru North MP and committee chairperson, Amos Lugoloobi stated.
 
The MPs also argued that reducing taxes would generate more money for the government in the long run as it would boost the use of mobiles.
 
The call is not likely to get a good reception from the Government considering that last year it had planned introduction of a $0.2-0.25 levy per minute effective July, but mobile operators opposed the move, saying it will hurt their margins and increase calling rates in the country.
 
The UCC’s director in charge of technology, network and services, Patrick Mwesigwa informed MPs in March this year that the principal objective of the regulations is to promote the use with confidence of text and multi-media messages by telecommunication subscribers and end users of services in Uganda with minimized encumbrances from mobile spam.
 
“We have come up with sanctions to be imposed on the companies that will contravene these guidelines. These include penalties, compensation or refunds to the affected customer(s) and instruction to the Telecommunication Operators to suspend or terminate any contracts with the violating service provider,” he said.
 
Mwesigwa also said the guidelines seek to provide a transparent mechanism for complaint handling in relation to text and multimedia messaging and ensuring complaints are handles in a fair and efficient manner.
 
In October last year, some telecoms announced an increase in voice call rates. MTN, Uganda’s biggest telecommunication company by subscribers, for instance, increased the call rate for subscribers using the per minute billing plan from sh240 to shs270 per minute calling other networks, while the rate within the network remained unchanged at shs240.
 
The rate for subscribers using the per second billing plan went up from sh4 (sh240) to sh4.5 per second. 
 
Calling subscribers on other networks using the ‘per second’ billing plan is costing sh5 per second, up (sh300 per minute) from sh4 (sh240 per minute).
 
In late 2011, telecoms increased the rates to sh240 per minute across all networks from sh180, citing the increased cost of doing business that resulted from the challenging economic environment that the country experienced in 2011.
 
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