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CSOs Warn Govt On Social Media Tax And Tax Exemptions To Foreign Investors

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Finance minister Matia Kasaija

 

Civil Society Organisation (CSOs) under the tax justice alliance Uganda, a consortium of NGOs advocating for better taxation have advised govt to have fair and just ways in which taxes are collected from Ugandans as it hopes to finance the 2018/19 budget.

The consortium comprising of Action Aid Uganda, Uganda National Health Consumers Organization, SEATINI Uganda and Uganda Debt Network are of the view that the proposed tax measures for the FY 2018/19 presented to parliament by the finance minister which include, the income tax amendment bill 2018, lotteries and gaming amendment bill 2018, excise duty amendment bill 2018, VAT amendment bill 2018, stamp duty amendment bill 2018 among others are going to become a huge burden to Ugandans and this will in a long run create tax evasion hence low tax collection.

Addressing a joint press conference today in Kampala, Namagga Imelda, the Programme manager Uganda Debt Network says, most of the taxes imposed on locally manufactured goods and services will instead lead to increased prices hence low consumption which in the long run will affect local production as well as low utilization of services in banks.

However, Fred Kawooya the programme manager Action Aid Uganda cautioned govt on taxing SACCOs, social media and mobile money transactions, saying this will impact negatively on the wellbeing of the poor Ugandans who have turned these channels as their remedies for financial support. The legal officer at Uganda National Health Consumers’ Organization Talibita Moses advised govt to impose more taxes on cigarettes, beer, old vehicles and other luxurious things than imposing heavy taxes on necessities.

Uganda projects domestic revenue totaling to UGX. 15,547 billion, of which UGX.15,130 billion is tax revenue and UGX.418 billion is non tax revenue, which amounts to about 53% of the total resource envelope which has been estimated at UGX.29.274 trillion to finance the budget.

 

Tax Activists Still Warn Against Tax Exemptions To Investors

The programme manager Action Aid Uganda Fred Kawooya cautioned govt on the continued tax exemption to foreign investors saying this greatly hurts the economy.

Kawooya said, “ministerial powers to issue tax exemptions to investors are too much and need to be transferred from the minister to parliament which can do necessary research and verify who qualifies for tax exemption and who doesn’t.”

Uganda has for long been issuing 25 years tax exemption to investors which economists say, this puts a burden on the economy and on other loyal tax payers.

 

 By Mboowa Nathan 

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Entebbe Security Bosses Arrest Tycoon With A Store Full Of Fake And Expired Goods

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David Musisi who was arrested over selling expired goods

 

Security officials in Entebbe municipality led by Eriasa Nimusinga, the District Intelligence Security Officer (DISO), raided the home of David Musisi and impounded merchandise worth millions of shillings, which was said to be fake and expired. The raid followed a tip-off from a lady who had bought some of the products from a boy who was hawking them.

Musisi’s warehouse that was raided

“When I bought a lotion from the boy, it had a bad scent which was different from the one I knew because I have been using that type for a long time. Even after trying it on my skin, it was corrosive, this prompted me to check the expiry date which indicated the lotion had expired in 2017,” narrated a lady who preferred her identity to remain anonymous.

After the raid, several boxes full of products that were presumed to be fake and expired were found kept in an incomplete two-storied building in Kitooro ward, Entebbe municipality. Among the impounded products included; cosmetics, food supplements, cigars, among others. The same building which has several shops, banks and a forex bureau, is the residence for Mr. Musisi and his wife.

According to some business owners at the same building, David Musisi is a former reverend at one of the churches at Bugonga, Entebbe municipality. However, Grapevine could not independently verify the claim. He is said to have spent several years in the USA before returning to Uganda.

The accused plus the boy found hawking the goods, were both taken to Entebbe police station, while his home/shop remained cordoned off by police pending further investigations.

No security official was available for a comment about the charges preferred against the business mogul.

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AUDIO: Workers Run To Court As ZTE Fires All Ugandan Staff After Ban, Huawei Also In Trouble

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Zhongxing Telecommunications Equipment (ZTE) has fired all it’s staff in Uganda. In a meeting held at their company offices on 3rd May 2018, the ZTE Human Resource manager Daniel Balaba called a crisis meeting where he broke the bad news to all staff that the company was terminating all their contracts with immediate effect because of the ban imposed on them by the USA.

In the same meeting, Balaba called for calm and assured all staff that the company was going to pay all their Salary arrears and allowances.

However, a source inside ZTE has told the Grapevine that the chinese smart phone maker want to run away with their money. The source further told this website that some agrieved staff have run to court and are accussing ZTE of terminating their contracts unfairly without giving them a clear reason.
WHY ZTE WAS BANNED?

The US Department of Commerce announced a seven year ban on the Chinese smartphone maker ZTE after it was discovered that they have been illegally exporting products containing U.S.-sourced components to Iran and North Korea.

ZTE, one of China’s most successful technology company, with about $17 billion in annual revenue, is now facing a death sentence. The Commerce Department also blocked its access to American-made components until 2025, saying the company failed to punish employees who violated trade controls against Iran and North Korea.

A Reuters report states that ZTE’s US ban may also cost the Chinese company its Android license as well. This means ZTE may not be able to use Google’s mobile OS in its devices.

ZTE, which uses Qualcomm processors in many of its phones and exclusively employs Google’s Android operating system and apps, indeed relies on U.S. companies to a significant degree.

The telecom giant was forced to pay more than $800 million in penalties for that transgression, and was directed to rebuke all personnel responsible as part of its plea deal. However, last month, U.S. Department of Commerce investigation found that ZTE retained all of those employees and paid them bonuses. In response, the U.S. government served the company with a ban, forbidding it to use any U.S.-sourced technology in its products for seven years.

ZTE responded by calling the ban unfair, saying it was delivered “before the completion of the investigation of facts.” The company added that the “Denial Order will not only severely impact the survival and development of ZTE, but will also cause damages to all partners of ZTE including a large number of U.S. companies.”

The Grapevine tried to Talk to Balaba for a comment but we couldn’t get him…

Audio of ZTE HRM breaking the bad news to staff:

 

HUAWEI ALSO IN TROUBLE

According to numerous online media outlets which include, Reuters, WSJ, Forbes, zdnet among others, Huawei is also reportedly under criminal investigation for possible export control violations to North Korea and Iran.

The Justice Department probe is being run out of the U.S. attorney’s office in Brooklyn, reuters sources said. John Marzulli, a spokesman for the prosecutor’s office, would neither confirm nor deny the existence of the investigation. The probe was first reported by the Wall Street Journal on Wednesday.

Huawei, the world’s largest maker of telecommunications network equipment and the No. 3 smartphone supplier, said it complies with “all applicable laws and regulations where it operates, including the applicable export control and sanction laws and regulations of the UN, US and EU.”

Like ZTE, Huawei also runs google’s android software on their smartphones and a ban could spell even a much bigger disaster than Huawei. When the Grapevine talked to an official from Huawei, he told us that, “those are just mere allegations, no document has come out to claim that Huawei is under investigation.”

CHINA WARNS

In Beijing, foreign ministry spokeswoman Hua Chunying said China opposed countries imposing their own laws on others, when asked whether Huawei violated U.S. sanctions related to Iran.

“China’s position opposing nations using their own domestic laws to impose unilateral sanctions is consistent and clear,” she told a daily news briefing.

“We hope that the United States will not take actions that further harm investors’ mood towards the business situation there.”

In February, Senator Richard Burr, the Republican chairman of the U.S. Senate Intelligence Committee, cited concerns about the spread of Chinese technologies in the United States, which he called “counterintelligence and information security risks that come prepackaged with the goods and services of certain overseas vendors.”

 

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Over 100 MPs To Collect Signatures To Petition Kadaga On Mobile Money Tax

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A group of MPs led by the deputy opposition whip Roland Kaginda, Gaffa Mbwatekamwa (Kassambya County) and John Baptist Nambeshe (Manjiya county) have told the press today that they hope to collect 320 signatures by end of this week to stop the government proposal to levy 1% tax on mobile money transactions in the financial year 2018/19 national budget.

The group that consists of MPs from the Parliamentary Forum on Public Finance Management and the Greater North Parliamentary Forum say that the tax on mobile money transactions will hurt the poor and frustrate financial inclusion because less than 485 of the 112 districts in Uganda have access to any bank branch and ATM and more than 10 million Ugandans access financial services through mobile money.

Mbwatekamwa says that the tax proposal could promote money laundering and other black-market operations, he therefore proposes that the ministry of finance increases the excise duty from the proposed 10% to 17.5% on mobile money withdraw fees to generate 122 billion shillings. He says that though this will fetch 33 billion shillings less than what could be generated from the 1% tax on transactions; it will avert numerous economic disasters.

He adds that the government should consider raising taxes on mobile money income balances especially the escrow accounts which could result in collection of 800 billion shillings, encourage savings and income distribution. In the worst-case scenario of a 3% Treasury bill interest, government can collect 5 billion shillings from interest income on various mobile money user accounts.

MP Okin Ojara also added that the government needs to first conduct studies and plan before proposing tax measures including the one on the ban on importing old vehicles.

 

By Stella Mugoya

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