MPs want review of 2% broadcasters levy

Executive director UCC, Godfrey Mutabazi. Photo by Nancy Nanyonga

Following protests by broadcasters to pay an annual 2% levy on their gross revenue, Parliament has recommended to government to further review the Uganda Communications Act to provide modalities of payment.

Debating a report of the Committee on Information and Communication Technology (ICT) yesterday, the MPs said the minister should consider the possibility of reviewing the entire Uganda Communications Act 2013 or the regulations to specify that individual operators should pay a specific amount of levy depending on revenues.

This was during the debate on the Communications (amendment) Bill 2016 which was later passed by House.

Although the House did not discuss much about the levy, the committee members in the report argued that although tax payment is mandatory, Uganda Communications Commission in consultation with the operators may come up with a formula of payment.

"We sympathize with broadcasters especially small operators. But they should consider this levy as an operation cost and live with it. Unfortunately we know that they will transfer this cost to the consumers," committee vice chairman Maxwell Akora said.

The Bill seeks to amend section 93 (1) of the communications Act to remove the requirement for parliamentary approval of regulations made by the minister under.  The Bill was passed by Parliament yesterday.

In the report, Committee members noted that although the broadcasters had requested the committee to remove the levy, they could not since it was not part of the Bill.

"The only thing we can do is to recommend to the House to urge the minister review the entire law or include the revision in the regulations since amending the law may take another 5 or 10 years," another MP argued.

Section 68 of the Uganda Communications Act imposes a 2% levy on gross annual revenue of all operators including broadcasters. The broadcasters however urge that the levy was only meant for telecommunication companies.

Although UCC insists that the broadcasters should pay the levy, it has never implemented it. Recently, UCC sent copies of the agreement to broadcasters detailing license fees payable annually by broadcasters and asked them to sign.

But broadcasters refused to sign saying the move is likely to have a devastating effect on the revenues and financial position of the radio and television stations.

In a protest letter to the commission executive director Godfrey Mutabazi, the chairman national broadcasters association Kin Kariisa argued that the move will not only put jobs at risk but will also stifle new artists trying to break into the entertainment business and harm the listening and viewing public who rely on local media.

According to Kariisa, the broadcasters continue to protest the levy since it was never, in the first place, intended for broadcasters but telecommunication operators.

He wondered why UCC was keen on implementing the charge yet the matter is still under discussion and no clear conclusion has been reached between the parties.

"As you are aware, this is a matter that is yet to be concluded following prior correspondences between the national association broadcasters, UCC and other stakeholders. It is therefore improper for UCC to demand that broadcasters sign a license agreement with the provision enforcing the payment of the said levy when the matter is clearly still under discussion," Kariisa said.

Vision Group chief executive officer Robert Kabushenga while appearing before the Committee last month appealed to members to review the levy saying if implemented, the move is likely to drive many broadcasters out of business.

Kabushenga warned that if these numerous charges imposed on broadcasters continue, in a very short time, people are likely to run away from the sector or start cutting corners, thereby compromising the standards.