We have not levied new tax on airtime, says URA - Daily Monitor

We have not levied new tax on airtime, says URA

Friday November 10 2017

Telecom services. Used airtime  scratch cards

Telecom services. Used airtime scratch cards from different telecommunication providers. Uganda Revenue Authority has denied levying new tax on airtime. PHOTO BY MICHAEL KAKUMIRIZI 


KAMPALA. Uganda Revenue Authority (URA) has clarified that there is no new tax levied on airtime scratch cards but instead asked the telecom operators to account for the full value of the price on scratch cards.
The telecoms have been giving discounts to distributors of the scratch cards and it’s on these discounted fees that they have been declaring their VAT instead of the full face value.
Mr Ian Rumanyika, the URA manager for public and corporate affairs, said: “What happened, for example, airtime of Shs10,000 sold at Shs9,300 and the telecom companies would declare and charge VAT at Shs9,300 instead of declaring full face value of the airtime.”

There has been a wide-spread outcry by customers that the price of airtime scratch cards had been increased.
Customers, especially from upcountry, have been asked by the retailers to pay between Shs200 and Shs500 more than the fixed price when purchasing scratch cards.
But Mr Rumanyika says the distributors do not offer services to the telecom subscribers but to the telecom firms by distributing their products.
“It was agreed that telecoms must account for the full value of airtime and then the distributors charge the telecoms for their distribution services,” he explained.

Distributors speak out
In an interview with this newspaper yesterday, Mr Emmanuel Matovu, a distributor at Kabalaga in Kampala, said the telecoms have been giving them a 4 per cent margin off the scratch cards sold.
However, this has since been reduced to 3 per cent and 2.5 per cent on the scratch cards sold.
“This means the agents’ commission earned from the sale of airtime reduces that is why you see some have resorted to hiking the price of the scratch cards especially upcountry,” he said.
In an interaction, Mr Isaac Kyanzi a supervisor for Heritage Telecom Ltd, the distributors of airtime scratch cards to Matugga area in Wakiso District, said they only reduced the commission by 1 per cent from 4 per cent.