Minister: We have got Shs 7bn in OTT, mobile money taxes

Confusion continues to cloud comments by Finance State Minister David Bahati and the ICT minister, Frank Tumwebaze, over how much revenue the state has so far collected from the controversial mobile money and over the top tax (or OTT) for online access.

In a press briefing at the Uganda Media Centre yesterday, the ministers claimed that the government had raised Shs 5bn from mobile money tax and Shs 2bn from the OTT tax, over the last week.

“We have managed to collect I think Shs 5bn from the mobile money tax and Shs 2bn from the OTT tax,” Bahati said. “This money was collected from the 10 million internet users across the country.”

However, Uganda Revenue Authority spokesman Vincent Seruma revealed a different picture when interviewed last evening.

“We have no idea how much money has been collected since they started levying the two taxes as the telecom companies are yet to report back on how much money has been collected,” Seruma told The Observer.

Seruma’s comments rhyme with those of the telecom operators, who say they are still watching the situation. At the same time, some senior officials at MTN and Airtel, the main players affected, indicated that they were worried about the impending heavy losses. They said business has considerably slowed down.

“Business is bad these days but we are watching the situation…it is too early to press the panic button,” said an official from MTN Uganda.

For their part, a top official at Airtel was concerned that online traffic and mobile money transactions had declined, but they were worried that the impending ban on airtime scratch cards would make an already bad situation much worse.

A quiet public stay-away protest against either tax is underway with mobile money operators reporting huge drops in business.

This follows even more confusion over the new, widely unpopular levies after MPs initially claimed that they were unaware of the two taxes being part of the budget bill that they passed in the House last month.

The bill passed weeks before the budget day was formally presented to MPs, weeks before the taxes were finally levied. And then finance minister Matia Kasaija made the astonishing claim that the 1% charge on mobile money transactions was smuggled in since, as far as he was concerned, the agreed rate was 0.5%.

To add even more drama to the debate, following more public outrage towards the taxes, the president then ‘clarified’ that mobile money users were supposed to pay 0.5% tax, and not 1% as set up in the law.

However, Tumwebaze claimed in the briefing that it was not true that the MPs were unaware of the 1% levy on mobile money, as it had been debated in parliament. He explained that after it passed in parliament, cabinet approved the tax before the president assented to it.

“The new 0.5% levy is the result of public complaints. We could not amend the tax immediately because it requires a process which is governed by the law,” Tumwebaze added.

The ICT minister added that they had been motivated to set up the mobile money tax on realising that some 63% of all cash transactions countrywide are happening on this platform.   

Bahati who indicated that the state had planned to raise Shs 115 billon before the mobile money tax was reduced to 0.5% per transaction, was looking forward to windfall.

“On mobile money tax, we plan to charge only withdrawals, and hope to get about Shs 118bn, which will help us to finance our budget,” Bahati added.

Challenged on this, Bahati left many more scratching their heads.

“By the time we implemented 1% tax we did not have the correct statistics but now we have, and therefore the revenue expected is much more,” he said.

Meanwhile, Tumwebaze said there would be no amendment on the Shs 200 daily OTT tax for social media access, since they expected the 10 million social media users to pay regularly. He claimed that the government would realise about Shs 284 billion in revenue by the end of this calendar year.

“This is a lot of money to generate revenue for the NRM manifesto as well as to save Uganda from borrowing from foreign countries. Because if we keep borrowing, we will be losing. So, it’s better we create our own source of income.”

Tumwebaze argued that the state was charging OTT tax in a bid to improve access to internet throughout the country, through expenditure on much needed infrastructure. Internet access would be extended to hospitals and schools among other central installations around the country, he said.