By Our Reporters
President Museveni will certainty require much more time than originally thought to get to the root cause of problems that prompted him to direct security crackdown on the SA telecom giant. Whereas much has already been written, we have learnt of existence of another file on the President’s desk relating to the Shs362bn VAT claim URA originally raised against MTN only for the same to be controversially reduced to a paltry Shs20bn. This curious reduction, causing Museveni to become very furious, was agreed upon in a process that was supervised and sanctioned by the Judiciary through a mediation process conducted under the Commercial Division of the High Court. “Not that the President is opposed to mediation. His problem is that government gave away too much under the cover of mediation and wants concerned officials to explain why they occasioned so much financial loss to the government,” an influential State House assistant says of the President who has publicly been criticizing MTN on not being adequately accountable when it comes to declaring its revenues and the resultant tax obligations.

It will be recalled that in December last year, URA prepared a list of companies that had pending obligations and on that list was MTN whose tax liability was stated to be Shs20bn. The listing indicated MTN owed Shs20bn, a figure that was controversially arrived at through mediation conducted in the Commercial Division of the High Court where URA had filed a taxation dispute case against MTN Uganda. The mediation reference was registered as 087/2016. The original head suit filed by URA against lawyer Oscar Kambona-represented MTN was registered as 0938 of 2016. We have seen the court pleadings in which URA (the Plaintiff) originally accused MTN of failing to account for Shs362bn in unfulfilled VAT tax obligations. This was arrears that was arrived at after URA commissioned a special inquiry into MTN tax declarations. MTN duly filed its Written Statement of Defense clarifying on the circumstances under which their VAT bill rose to Shs362bn. This full file (even when it was subsequently closed as a result of successful mediation) is something Museveni has adequately studied and found a lot of discrepancies over which he is planning to punish government officials he now says didn’t act prudently enough. He feels their actions and omissions bordered on economic sabotage. The big man is disturbed with the excessive generosity government teams exhibited at the mediation stage to the extent that it was agreed to reduce the MTN VAT tax obligation from Shs362bn URA had originally claimed to mere Shs20bn! Reliable State House sources say this one area where Museveni wants detectives (at the center of the current MTN inquiry) to ask tough questions about with a view to cause prosecution of some people for possible criminal negligence. (For feedback, write to us at



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