“MTN Uganda collected billions of shillings from telephone callers from all walks of life, including boda boda drivers, your elderly parents in rural areas, your siblings, and others, but they never paid this tax.” Why should we take out loans from overseas banks to build infrastructure when MTN Uganda won’t pay these taxes? MTN is responsible for collecting taxes imposed by the government. Thus, this business gathered the funds and took them. These taxes must be paid by them.
MTN Uganda has been ordered by the Uganda Revenue Authority (URA) to pay Shs 260 billion in unreported taxes.
In a recent “unfounded” tax assessment, MTN Uganda CEO Sylvia Mulinge accused URA of using “coercive tactics” to extort Shs 260 billion from the telecom.
Additionally, the telecom business accused URA officials of having “corrupt intentions” in the tax issue, threatening the financial viability of the biggest telecom in Uganda.
URA has, however, demanded that MTN Uganda make the assessed tax payment as soon as practicable.
According to a senior URA official who wished to remain anonymous in order to speak freely, “it is very simple. URA has the option of objecting to the tax.”
The source went on to say: “MTN Uganda is still required to pay the tax as of right now. This is excise duty and VAT that the telecom collected for the government over the previous five years but failed to send to URA; it is not corporation tax.
In order to audit the telecoms’ tax compliance, URA paid the Kenyan company SafariTech Shs 13 billion in 2023.
President Museveni issued the order after publicly denouncing the telecom industry’s major players’ tax fraud.
MTN Uganda’s unpaid taxes on trillions of local and international phone calls serve as the sole basis for URA’s tax assessment.
In line with reports It was discovered that in order to settle the tax dispute, URA met with Mulinge and other senior MTN Uganda executives eight times.
Following the harmonisation of the interpretation of business rules during the auditing process, the amount of unremitted taxes that URA initially assessed dropped to Shs 260 billion.
The head of the State House Revenue Intelligence and Strategic Operations Unit, David Kalemera, received a sharply worded letter from Mulinge requesting his assistance in the tax situation, which officials said astonished URA.
On September 30, 2024, MTN Chief Executive Officer Sylvia Mulinge wrote, “We urgently seek your intervention regarding the Uganda Revenue Authority’s (URA) decision to uphold an unfounded tax assessment of Shs 260 billion against MTN Uganda, despite comprehensive evidence proving its inaccuracy.”
In addition to being essentially unfair, this coercive strategy also raises questions about corrupt practices within the URA, Mulinge noted. “This assessment seems to be an intentional effort to compel MTN to take the matter to the Tax Appeals Tribunal (TAT), which would require an immediate payment of 30% of the assessed amount (Shs 78 billion).”
According to URA authorities, their tax assessment was supported by Global Voice Group (GVG), a tech company Uganda hired to track and enhance tax compliance in Uganda, and call data records (CDR) provided by MTN Uganda.
“URA made tax assessments using call data from MTN Uganda. According to a prominent government source, “We challenge the telecom to go to court to protest the tax assessment.”
“MTN Uganda collected billions of shillings from telephone callers from all walks of life, including boda boda drivers, your elderly parents in rural areas, your siblings, and others, but they never paid this tax.” Why should we take out loans from overseas banks to build infrastructure when MTN Uganda won’t pay these taxes? MTN is responsible for collecting taxes imposed by the government.
Thus, this business gathered the funds and took them. These taxes must be paid by them.
Mulinge stated that URA’s actions had serious repercussions.
“MTN’s operations, our capacity to support the economy, and investor confidence in Uganda will all be severely impacted if this assessment is accurate.
She emphasized that this conduct by a government agency is damaging to the nation’s appeal to investors since it makes it evident that even the most obedient taxpayers are susceptible to capricious and opportunistic activities.
Government representatives asserted, however, that MTN is required to pay any taxes collected on the government’s behalf.
“Now is the moment for repayment if they received this money and enjoyed it. Their issue is how they raise this money. The insider also stated that the government is prepared to offer them a payment schedule.
In 2023, MTN collected almost Shs 1.1 trillion for the government and paid over Shs 200 billion in income taxes.
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