KAMPALA, Uganda — A bitter tax dispute has erupted between MTN Uganda and the Uganda Revenue Authority (URA) over a whopping Shs 1.5 trillion ($409 million) in allegedly unpaid taxes.
The dispute stems from a comprehensive audit conducted by SafariTech, a Kenyan firm specializing in taxation audits. The audit, which covered the period from 2019 to 2022, revealed significant variances in MTN’s self-declared taxes.
According to the URA, MTN Uganda failed to declare local excise duty, Value Added Tax (VAT), and corporate tax totaling Shs 330.7 billion, Shs 554.5 billion, and Shs 651.3 billion, respectively. The tax authority alleges that MTN collected these taxes on behalf of the government but never remitted them.
The audit findings have sparked concerns about the potential impact on Uganda’s economy, particularly if MTN Uganda is forced to pay the disputed amount. Some experts warn that the company’s financial health could be severely impaired, potentially leading to an “untimely departure” from the Ugandan market.
“The implications of this audit are not only diverse but also distractive to the economy in the long run,” said a top-level official from a rival telecom company, who preferred anonymity due to conflict of interest.
MTN Uganda has petitioned State House to intervene in the matter, arguing that the audit findings are flawed and the tax liability overstated. The company’s concerns are shared by some Finance ministry officials, who believe that the URA’s assessment may not accurately reflect MTN’s tax obligations.
“Assessing Shs 1.5 trillion on one company is not reflective of the current economic standing in Uganda,” said a Finance ministry official, who preferred anonymity. “Even when MTN was listed among the biggest taxpayers for the financial year that ended in July 2024.”
The URA, however, remains resolute in its pursuit of the allegedly unpaid taxes. According to tax experts, MTN Uganda has 45 days to object to the assessments, after which the URA will review the audit findings and issue a decision. If the dispute is not resolved, MTN Uganda may appeal to the Tax Appeals Tribunal or the Supreme Court.
