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
  • mail
  • img
newvision

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.
 
Related stories
 
 
Mobile money fees rise Publish Date: Jul 03, 2013
 
BUDGET: Experts react Publish Date: Jun 13, 2013

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
Using metrics to inform business strategies
Many executives let emotions guide their decisions, even when millions of shillings hang in the balance. As a leader, you cannot afford to make decisions based on gut feeling but data....
IMF optimistic about Uganda’s reforms
Recent improvements in public financial management in Uganda are expected to boost revenue collection and the quality of government investments, the International Monetary Fund has said....
Dr Maggie Kigozi: Obstacles in businesses are jewels
Dr Maggie Kigozi, director Crown Beverages Ltd has challenged the youth to consider obstacles in starting and running businesses as opportunities to create better lives....
How to widen Uganda’s tax base in a large subsistence economy
Uganda’s tax base remains small and the country is grappling with measures on how to widen the tax base in light of decreasing donor funds and pressures to finance the national budget....
UAE Exchange Uganda observed World Food Day
UAE Exchange, the leading global remittance, foreign exchange and payment solutions brand observed World Food Day on 16th October. This year the theme was Family Farming: “Feeding the world, caring for the earth”...
Nigerian cleric warns Uganda over oil curse
Rev Father Edward Obi, a leading civil society activists fighting against the effects of the oil curse in Nigeria has warned Uganda that since oil has been discovered Ugandans are not safe from the negative effects the resource brings....
Should the absence of bride price prevent couples from wedding?
Yes
No
Can't Say
follow us
subscribe to our news letter