New taxes are on the way for Ugandans

This Week in Ugandan News

January 11- January 17, 2020 

 

THIS MONEY WILL KILL YOU 

You will not hear this story anywhere else. It is not, on the surface, politically charged; about someone important, touching a sensitive constituency. There will be no hashtags about it because very few people outside of her four children, her grandchildren and extended family knew her name. 

On Saturday, January 11, 2020, Christine Abalo (53) ended her life. No one wanted her to end her life. Most especially not the members of Ribe Aye Teko (Unity is Strength), a village savings and loan association group in Pajimo Central Village in Labongo-Okwang Sub-County, Kitgum district.  

She was a mother, like most of the members of Ribe Aye Teko. She was a woman who had striven all her 53 years of life to raise the standard of living of her family, proud to have accomplished that with the work of her hands and mind. She should have been spending the beginning of her 50s surrounded by the laughter of music from her grandchildren but this is Uganda. So she was trying out a fruit vending business, to add an income stream for her family to prosper from. 

She had done something she had tried to avoid all her life: borrow. She had taken a loan from Ribe Aye Teko in September 2019 and was determined to pay it off before the debt became a millstone around her neck. It was a loan but she was ashamed of it. In her mind, she had shamed her family and herself by begging. And then she started to realize, as the fruit vending business did not yield adequate returns, she would not be able to pay back that 500,000 Uganda Shillings she had borrowed from Ribe Aye Teko. Disaster. 

On Saturday, January 11, 2020 rather than tell the members of Ribe Aye Teko she could not repay the loan, she decided to end it all. She ingested poison. In a country with a public debt of 41 trillion shillings that some experts estimate will take 94 years to pay off, she found the debt of 500,000/= insurmountable. Her life is over, Uganda continues to borrow. 

 

LOUIS KASEKENDE LEAVES BANK OF UGANDA BUT IS THAT A GOOD THING? 

Before 2018,  we did not imagine Governor Emmanuel Tumusiime Mutebile would be at Bank of Uganda forever. We expected, with the steadier hand of his deputy Dr Louis Kasekende on the wheel, that the long serving and weary Mutebile could finally be gently eased into  the sunset on a beach chair with a glass of bushera for company. 

Then 2018 happened. A year surely many at Bank of Uganda would like to forget. This was the year the impenetrability of Bank of Uganda was torn away, the myth shattered. We would learn through the public grilling of BOU officials like former executive director of bank supervision Justine Bagyenda that important decisions like the sale of National Bank of Commerce could happen through a mere phone call. Due diligence and protocol be damned. This is how six other banks “fell.” 

Mutebile, appearing frailer than usual, seemed out of the loop before the MP Abdu Katuntu led Commissions, Statutory Authorities and State Enterprises (COSASE) committee of parliament. Suddenly Kasekende’s steady stewardship of BOU was called into question. And then nothing happened. 

Until the end of 2019, it seemed like the exposure of the rot at Bank of Uganda would have no consequences. It did but not the headline grabbers that satiate a shocked and appalled public. Dfcu seems to be unable to successfully swallow the Crane Bank prize, disgorging high level managers  involved in the deal at an alarming rate. Businessman Sudhir Ruparelia seems to be re-emerging from the shade he had been cast into with wins in court over the closure of his Crane Bank. 

Then we learned that the rising star of Dr Louis Kasekende had reached its summit in December 2019 at deputy governor of Bank of Uganda. The appointing authority President Yoweri Museveni had declined to extend Dr Kasekende’s contract that was ending January 13, 2020. 

Dr Kasekende had served thrice as BOU deputy governor (1999-2002, 2010-2015, 2015-2019). A day before the expiry of his contract, after his pleas for an extension had fallen on deaf ears, Kasekende handed over his office to his supervisor Governor Tumusiime Mutebile. 

 No doubt a mop-up exercise continues behind the stone walls of Bank of Uganda on Kampala road. There are scores and accounts to be settled and a new deputy governor to be named. 

 

HOW TO SECURE YOUR CONSTITUENCY WITH SSEKIKUBO 

Theodore Ssekikubo came to parliament in 2001. Against all odds, the part-time lecturer at Ndejje University with little resources unseated the Lwemiyaga incumbent Sam Rwakoojo. Rwakoojo was not just the MP, he was backed by the Sembabule district kingmaker Sam Kutesa who is his cousin. 

The Observer reported that, “At the time, Ssekikubo’s current rival Patrick Nkalubo was the Sembabule district returning officer who had a tough time declaring Ssekikubo the eventual winner. 

Fearing that his victory would be overturned, Ssekikubo’s supporters sealed off the district headquarters and warned Nkalubo against declaring another winner if he still wanted his life.” 

We did not realize it then but a template was being set. Ssekikubo’s entry into parliament would never be smooth. Each election season is full of sound and fury and teargas in Lwemiyaga as Ssekikubo battles “his haters.” This year the “hater” is never-far-from controversy Security minister General Elly Tumwine, according to Ssekikubo at least. 

Ssekikubo accuses General Tumwine of, “enforcing the quarantine to create a monopoly and profiteer from cattle trade with his business associates at the expense of local livestock farmers. According to the MP, enforcing a false quarantine in Lwemiyaga is a deliberate ploy to compel farmers to sell off their livestock at a giveaway price in markets in the neighbouring districts that are already manipulated by Gen Tumwine’s associates.” 

Gen Tumwine denies having it in for Ssekikubo, ““All that is hopelessness. He's just trying to be heard or be seen trying to do something. It's not only his area that is under quarantine. The whole of Sembabule District is under quarantine...In a written document regarding why and how quarantine should be managed which was passed by Cabinet, first of all every citizen has a role against anybody who breaks the law. Once an area is declare under quarantine, it is the security forces which enforce.”

In the space of a week, Ssekikubo has been jailed twice for allegedly mobilising residents to defy a livestock quarantine, re-opening livestock markets and inciting violence against law enforcement officers in Sembabule. The first arrest was on Friday, January 10 and the second on Wednesday, January 15. 

Ssekikubo is reportedly unhappy about a Ministry of Agriculture quarantine to prevent the spread Foot and Mouth Disease (FMD) that was reported among some animals in Sembabule. Ssekikubo argues that the disease has not been confirmed in Lwemiyaga so it should be exempt from the quarantine. He says the security agencies do not have the right to close cattle markets in total disregard of the provisions of the Animal Diseases Act that only mandates the Commissioner Animal Health to issue such directives.

The concern for public health does not seem to have entered the debate. 

 

SHUTTING UP THE CHATTERING CLASSES 

It is often said that, “The Government of Uganda recognizes ICT as an important driver of Socio- economic transformation. The ICT Sector is one of the core sectors identified in the National Development Plan II as one of the Job creation sectors, apart from creating new business opportunities and increased house hold incomes.” 

It is policy, supposedly, that, “Government and private operators must coordinate in the development and deployment of broadband infrastructure so as to enable connectivity for all, digital inclusion and affordability.” 

This seems to have escaped the mind of the Uganda Revenue Authority top honchos during an appearance in parliament on Tuesday, January 14. The commissioner general of the authority, Doris Akol revealed that URA wants the Government to make a policy shift and scrap the current system of taxing OTT and directly tax Internet.

Akol said the authority had failed to meet the tax targets from OTT because of huge evasions. She added that from the tax, which was introduced in the financial year 2018/2019, the Government had projected to collect sh84b from daily charges of sh200  on all mobile phone users, who have access to Facebook, Whatsapp and Twitter. The collection fell far short. 

Parliament in June 2018, introduced a Shs200 tax levy on all telecom subscribers accessing social media sites such as Facebook, Twitter and Whatsapp, among others. 

The move followed a directive from President Museveni to the Finance ministry to widen the tax revenue base. The President said social media platforms such as WhatsApp, Facebook, Twitter, Skype and Viber were being used for propagating falsehoods and that for Ugandans to access the sites for what he called Lugambo, they should pay for them.

Government had hoped to generate between Shs400 billion and Shs1.4 trillion from the social media tax annually.

The opposite happened. Data from Uganda Communications Commission showed that the number of internet users declined by three million in the first three months of implementation. Instead of strategies to encourage more Ugandans to return to using the internet, more taxes are on the way. 

Akol was leading a delegation from URA to present the authority’s budget framework paper for the coming financial year 2020/21.

David Tumusiime is a Nile Post editor. 

Email: dtumusiime @nilepost.co.ug 

Twitter: @DavidTumusiime