Wednesday September 3 2014

Reduce taxes on international calls

Apart from Cuba, which does not relates well with the United States, Uganda is one other most expensive country to call by telephone when you are in the USA. It appears that, the taxes imposed on people calling Ugandans from abroad, especially the United States are immense. One telephone card dealer told me: “You people need to just go and talk to your government because the taxes are harming you, not us. Look at Kenya your neighbour, it is cheap over there”.
I don’t know why a country, presumably booming with a rapid mobile telecommunication network is charging its citizens in the Diaspora exorbitantly for calls. Surprisingly, I thought, they also talk of the Nkuba kyeyo remittances from abroad as a valuable source of foreign currency earnings for the country. But how do you expect your nationals to be happy remitting US dollars at home when they are paying 10 times to call home than their African colleagues. Nigeria has one of the most vibrant economies in Africa, and most recently even in the world but it is very cheap to call Nigeria and do business there.
I have not bothered to find out how much tax is charged per minute call to Uganda, but I know it hurts the Ugandan caller and consequently, the economy. I bought two cheap cards and tried them to call Uganda, Cuba, India and Kenya.
With one card called African Dream which costs $5, I had five hours of calling time to India and two hours calling card to Nairobi but just 30 minutes calling time to Uganda. That means that if a Ugandan wanted to negotiate a business proposal in Uganda and talk for five hours, they would have to pay 10 times more than that one calling India and four times than that one calling Kenya. Unfortunately, the same amount would only provide a one minute conversation to Cuba, which is so closer to the United States than any of these other countries.
I am sure the technocrats at the ministry of Finance see the implications of a very expensive telephone connection to Uganda. Of course it is two way. You either choose to make a lot more from the taxes and reduce the flow of talk – for investment and social interactions of the Diaspora and those resident at home. You can also decide to reduce the taxes and exploit added benefits from a vigorous communication.
James Kityo Ssemmanda
Ugandan resident in Boston