Business

URA to reap big from Orange sale

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Mr Godfrey Mutabazi, the UCC executive director, says UCC is not aware of the Orange Telecom sale. FILE Photo  

By ISMAIL MUSA LADU

Posted  Friday, May 23  2014 at  17:45

In Summary

Revenue. Tax body says there are capital gains that must be collected.

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KAMPALA.
Uganda Revenue Authority is monitoring the buyout of Orange Uganda by Africell with a view of collecting due revenues that will be made out of the transaction between the two French companies.
Orange Group, the sole brand of the France Telecom group for Internet, television and mobile services earlier in the week confirmed that it will be selling its stakes in Orange Uganda to Africell.

In an interview, Uganda Revenue Authority (URA) Commissioner for domestic taxes Henry Saka said from such a transaction, there are tax obligations that arise out of the sale (capital gains) that must be collected by the tax body.

Capital gains
“We are definitely interested in all the buyouts because they have tax implications. There is what we call capital gain tax and that arises out of such transactions. But we will analyse on case by case basis (both Orange and Umeme buyout) before determining how much is due in terms of revenue,” Mr Saka said on Wednesday,.

He continued: “However, at the moment, we are yet to be notified formally about the buyout but as soon as it happens, we shall get the details of who is selling, how much is being sold and when it happened then analyse. It is difficult to say how much will be recouped in terms of revenue because we are not yet sure whether they have sold or not. So we have to wait.”

The Chief Executive Officer of Orange Uganda, Mr Philippe Luxcey, had said in an interview on Tuesday that he cannot give details of the transaction because the entire process is being driven at the group level.

But when asked whether the brand name “Orange” will be retained, he said: “It depends although during the transition period, the name (brand) Orange could be discarded in preference of the new owners brand—name.”

Regulator unaware
Meanwhile, the industry regulator, Uganda Communication Commission (UCC) is not aware about the transfer of ownership from one French telecom company to another.

Mr Godfrey Mutabazi, the UCC Executive Director, told the Daily Monitor on Wednesday that he was not aware of any plans regarding the transfer of ownership from one telecommunication company to another.

In an earlier interview, an industry analyst, Mr Muhammad Ssempijja, said the move for the two telecom companies to do business is an indication that the telecommunication industry in Uganda is maturing.

He said: “This is a good thing. And this is not the last of such deals (sales) that will happen. As the industry matures, more of these will happen.”