Uganda telecoms firms blame high tax for business loss

Uganda telecoms firms blame prices on high taxes Uganda Telecom’s Oscar Kabata says calls and internet usage are down in Uganda. (Image source: Julio González/Flickr)Telecommunications firms operating in Uganda have blamed high tariffs on ‘unfair’ taxes that has resulted in the loss of their business

Disproportionately high government levies, they claimed, had forced the companies to increase their own charges for calls and internet use in order to survive in the market.

The claims were made during the Communications Consumer Parliament workshop organised by Uganda Communications Commission (UCC) in Kampala last week.

Represented by Uganda Telecom’s regulatory and competition affairs advisor Oscar Kabata, the companies claimed that usage of their services was actually in decline as a result of the taxes, which ultimately risked damaging the wider national economy.

“Based on the UCC access and usage survey 2014 that had just come out, there is a reported decrease in the number of people who are making calls. This is mainly because the high costs of this service and mainly it’s because we are forced to increase the costs due to high taxes.

“Our penetration in internet usage is also very low and it is because internet prices are still high compared to other countries. The government should be subsidising us because this sector is still growing,” Kabata added.

Ugandan ICT minister John Nasasira responded by saying that the government was aware of the decrease in calls and was reassessing current levies on the telecommunications sector with a view to foster the companies’ growth.

Telecommunication companies in the East African nation pay exercise duty of 12 per cent, VAT of 18 per cent, income tax of 30 per cent, and an international incoming calls levy of two per cent.

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