K2 Telecom closed over Shs 95 million debt

Tax collecting body, Uganda Revenue Authority, has closed Buganda kingdom’s K2 telecom over a debt totalling to shs95.8 million, The Nile Post has learnt.

According to Ian Rumanyika, the URA corporate and communication affairs manager, the debt accumulated since 2013, prompting the tax collection body to crack the whip against the telecommunication company, which was already limping.

“It has a debt of Pay As You Earn totalling to Shs 77.8 million and Local Excise Duty debt of 17 million,”Rumanyika told the Nile Post.

He noted that they had been negotiating with the telecom company since 2013 but efforts to have the issue solved proved futile, prompting them to close the company.

“We had a long discussion with them until we realised the memorandum of understating we had was not being fulfilled as expected and had to close them.”

He however noted that they expect the struggling telecommunication company to return to the table for talks on how they would pay the debt and resume operations.

Noah Kiyimba, the Buganda minister of Information assured that the arrears will be cleared and there is no cause for alarm.

"We are in close contact with URA. We have given them our repayment plan and at the end of the day we shall sort things out," he said.

 

Established in 2013 by the Mengo establishment, K2 telecom boasts of over 640,000 registered subscribers but only 156,000 of these are active.

Majority of the subscribers for the telecommunication company are mostly Buganda loyalists.

The company has however been struggling to break into the lead dominated by South African based MTN and Airtel which have bigger muscles.

In September 2017, the company was switched off over what management termed as technical problems.

Kiyimba said the technical problems resulted from the cancellation of their contract with Africell, the firm which used to host them.

He said they are about to be reconnected having reached an agreement with another telecom firm he did not disclose.