‘Traditional telecom providers under threat’ over OTTs, says Mutabazi

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Uganda Communications Commission (UCC) Executive Director, Eng. Godfrey Mutabazi has said that voice calls from telecom providers are on a decline due to increasing usage of social media services. This, the executive director says, affects the revenues of telecom companies and what government collects from them.

Mr. Mutabazi says that Over The Top services (OTTs) are slowly affecting some of the services provided by the traditional telecommunication providers.

Mutabazi in a social media dossier said that the communication’s sector is undergoing changes, revealing that with the changes in technology, normal calls will disappear in the near future as OTTs perfect their technologies.

“Voice calls from telecom provider are on a decline, it will become a natural choice for everyone to make a call using OTTs,” Mutabazi said, adding that it is time for the country to strategize and deal with what’s coming with the changes in technology.

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He said that OTT companies are generating huge revenue streams from the country but they are not licensed locally to pay taxes making Uganda lose a lot of money.

“OTT companies are not licensed locally for taxation purposes and we have not yet gained the critical mass to attract that kind of attention. Does that mean we lose out entirely? We pay taxes on beer, whisky, fuel and cigarettes. Is it impossible on OTT services?” he said.

Mutabazi said that there should not be contention as to whether to pay tax on OTT services or not, but the country needs to establish the convenient ways of payment.

“Developed nations mastered the art of disguising taxes which inevitability pass to consumers. Their advantage is they register these tech [technology] companies for taxation,” he said.

According to Mutabazi, traditional telecom operators will have to exploit the data business to survive. Because of an increasing data market (consumption), he added, users continue to access OTTs and the government collects economic rent by providing an enabling environment.

He further called on Ugandans to the support OTT tax, condemning those who opted to using VPNs instead of contributing to the country’s development.

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