URA | AIRTEL | PAYMENT | CUSTOMER

The Uganda Revenue Authority (URA) has blocked a sh3.4b interest payment to customers by Airtel over tax issues. 

On July 27, the telecom firm held a press conference where it disclosed that it was set to pass on the funds through its mobile money arm - Airtel Mobile Commerce Uganda Limited (AMCUL).

The sh3.4b is the total interest earned for idle money on the Airtel platform. This is money being held by customers, franchise partners, and over 150,000 agents.

Airtel said this was going to be their first interest payment to Airtel Money customers for money that had accumulated from transactions over three months.

David Birungi, Airtel’s publicist, however, disclosed that URA stopped the payments over tax evaluation and liability issues.

“Although they (URA) had asked for a withholding tax bill of Sh510m, which we agreed to remit to them, they asked for more time to evaluate the finances and procedure of payment,” he said in an interview on August 31.

He said if all goes according to plan, they will start remitting these funds to the beneficiaries starting next week.

“We were cleared by regulators – Uganda Communications Commission (UCC), Bank of Uganda (BoU), and our shareholders to make these payments." But we cannot proceed before URA gives us the green light,” Birungi said.

The New Vision was unable to obtain a comment from URA’s Assistant Commissioner for Public and Corporate Affairs, Bbosa Ibrahim since calls to his known phone number went unanswered.

In their first-ever interest payment to their mobile money clients, nearly 20 million customers are supposed to earn interest on their daily balances for the past 91 days, to be calculated between April and June 2022.

Japhet Aritho, the AMCUL managing director, stressed that accounts that have been dormant for 14 months but have balances, will earn interest too, adding that owners will just need to activate their lines to redeem their money.

“Following the approval of the AMCUL trustees and the Uganda Communications Commission (UCC), the regulator, and Bank of Uganda, we will commence payment of interest on quarterly balances to about 20 million customers who have an Airtel mobile money account with AMCUL,” he said, adding that interest is earned by any customer who has a minimum of sh1 (one shilling and above) daily for 91 days.

The Bank of Uganda Mobile Money Guidelines (2013) stipulates that the agreement between the licensed institution and the mobile money service provider shall provide for the establishment of an escrow account in the licensed institution.

The guidelines state that "the funds in this account do not belong to the mobile money service provider, but the holders of the e-money in the mobile money platform." It’s against this background that Airtel made a move to disburse the said money in the escrow account to mobile money account holders, franchise partners, and agents. The regulations, which are supposed to be followed by all mobile money service providers, came into operation early this year.