- The Uganda Revenue Authority (URA) has reportedly demanded that MTN Uganda pay Shs 260 billion ($70.9 million) in unpaid taxes.
- “As of now, the tax still stands and MTN Uganda has to pay it. This is not corporation tax but excise duty and VAT that the telecom collected on behalf of the government over the past five years but did not remit it to URA,” a source told ChimpReports.
- According to them, MTN is obligated to remit all taxes collected on behalf of the government. “If they collected this money and enjoyed it, now is payback time. How they raise this money is their problem. Government is willing to give them a payment plan.”
This follows the telco’s accusation that the URA is using ‘coercive tactics’ to extract Shs 260 billion from them in a ‘unfounded tax assessment. MTN also alleged that the URA officials exhibited ‘corrupt intentions’ in the tax dispute, which, it said, threatened its financial stability.
In 2023, URA hired Kenyan firm SafariTech to audit telecoms’ tax compliance, following the directive of the country’s president who publicly condemned tax evasion by major telecom players.
In September 2024, MTN Uganda wrote to David Kalemera, Head of the State House Revenue Intelligence and Strategic Operations Unit, urging his intervention in the Authority’s decision to uphold the tax assessment.
According to reports, the tax assessment is solely based on MTN Uganda’s unpaid taxes on trillions of dollars in international and domestic phone calls. The unremitted taxes were initially assessed at Shs 1.5 trillion ($409.1 million), but this figure was later reduced to Shs 260 billion after business rules were interpreted more consistently during the audit process.
MTN Uganda CEO Sylvia Mulinge stated that if the assessment stands, it will significantly impact the telco’s operations, limit its ability to contribute to the economy, and undermine investor confidence in the country.
MTN stated in August 2024 that its revenues were independently audited, correctly accounted for, and tax-compliant.
Meanwhile, a source reportedly stated that MTN Uganda had collected billions of shillings from people in all sectors, including boda boda riders, rural residents, and family members making phone calls, but had failed to remit the necessary taxes.
The source questioned why the government would borrow money from foreign banks for infrastructure development when MTN Uganda is allegedly withholding tax payments.
“MTN is a collector of taxes levied by the government. So, what this company did was collect the money and take it. They will have to remit these taxes, ” the source concluded.
