By Our Reporters
Today Tuesday morning, leading Chief Executive Officers descended on Kampala Serena Conference Center for their 9th annual CEO Forum. This forum brings together CEOs to reflect on the ending year and chat a way forward on how they can leverage on their relationship with government to serve the public better in the subsequent year. Government was ably represented by Planning Minister David Bahati, NPA ED Dr. Joseph Muvawala and Dr. Peter Ngategize who heads the private sector development unit at the Ministry of Finance. The theme was “National Convention on Making Economic Growth inclusive, equitable and sustainable.” A number of CEOs spoke at the event including NSSF’ amiable Richard Byarugaba who made some remarks with which UCC’ Godfrey Mutabazi (speaking immediately after him) wasn’t comfortable. At the start of Byarugaba’s presentation, Solomon Rubondo who was the MC introduced Byarugaba as “the pastor of finance.” As a statement of general observation, Byarugaba (who was speaking on behalf of other CEOs under the Financial Services cluster) made reference to a study his organization recently conducted sampling to tell their members’ views on a number of topical developments in the country. One of these was the introduction of the mobile money tax and the other concerned the Over the Top (OTT) taxes. Byarugaba, whose submission stressed mostly the need to embrace new technologies (he called it Fintechs) for businesses to remain competitive, reported that 66% of NSSF members felt it was imprudent to introduce the OTT tax. And for the mobile money tax, he said 100% said it wasn’t a good tax at all. In a surveying exercise in which Dr. Sarah Sewanyana’s EPRC and Willbroad Owor’s Uganda Bankers Association actively participated, a large number of respondents also expressed dissatisfaction with the way Bank of Uganda is conducting its regulatory function superintending over the banking industry. Saying integration of Fintechs in service delivery was simply unavoidable, Byarugaba enumerated jobs that will become unavailable by 2022 as was recently established by the World Economic Forum.
He announced that, in order to encourage innovations tapping into the vastly talented young people, his NSSF had earmarked $300,000 to help companies scale up on the innovations activities. There will be a grand launch in November, Byarugaba told an excited audience. When his time came, Mutabazi pronounced himself on many things including registering his discomfort with the findings of the NSSF survey showing public discontent towards OTT and mobile money tax. He respectfully disagreed with Byarugaba (whom he said was his very good friend) by saying it was improper for facebook to make so much money on the Ugandan users without the GoU being able to recover any taxes. He said such would be unfair to companies like MTN which has invested over $1bn in the network infrastructure in Uganda. He said Mark Zuckberg’s facebook services are accessed on top of the network infrastructure so painfully invested in by MTN. “They are making a lot of money here without investing anything and so what do you want us to do? To allow MTN and Airtel to die?” wondered Mutabazi who confessed being aware of the “very intriguing survey findings” Byarugaba made reference to. “Yes I agree there could be a problem with the way OTT has been implemented and maybe we should plan to implement it more indirectly next time but the principle is okay.” Mutabazi said Western Europe doesn’t levy OTT taxes because of the economies of scale that bring down the cost of investing in network infrastructure but some economies in South America do. However, Mutabazi didn’t specifically name those economies that have OTT in South America. Byarugaba’s point was later on (in Mutabazi’s absence) corroborated upon with approval by NPA’s Joseph Muvawala who faulted his government for rushing to introduce the mobile money and OTT tax without first carrying out the benefit-cost analysis to see whether the detriment resulting from the tax was worth the burden of having it introduced at all. Muvawala, whose job entails assessing performance and suitability of government policies, said it was now going to become mandatory for all government tax policies to be reviewed annually to assess their suitability. Byarugaba and Muvawala’s observations were later on fortified by EPRC Director Dr. Sarah Sewanyana who said the OTT and mobile money tax was unnecessary. She accused Mutabazi of “working in silos” and thereby not being able to know how OTT impacts on other sectors.” Whereas Byarugaba stayed longer, Mutabazi left immediately after making his long submission in which he referred to many other things pertaining the communications sector.
