Uganda: MTN Uganda in $70.9 Million Tax Dispute with Ugandan Tax Authority

MTN Uganda is embroiled in a tax dispute with the Uganda Revenue Authority (URA) over an alleged Shs 260 billion ($70.9 million) in unpaid taxes. The telecom company has accused the URA of using “coercive tactics” in what it describes as an “unfounded tax assessment,” and claims the tax authority’s actions are threatening its financial stability. Additionally, MTN has raised concerns about alleged “corrupt intentions” displayed by URA officials in the ongoing dispute.

The conflict stems from a broader investigation initiated by the Ugandan government in 2023, when the URA enlisted Kenyan firm SafariTech to audit the tax compliance of major telecom companies. This audit followed a directive from the Ugandan president, who publicly criticized telecom operators for evading taxes.

In September 2024, MTN Uganda formally reached out to David Kalemera, Head of the State House Revenue Intelligence and Strategic Operations Unit, requesting his intervention in the URA’s decision to uphold the controversial tax assessment.

The assessment in question is reportedly based on MTN Uganda’s unpaid taxes on trillions of shillings generated from both international and domestic phone calls. Initially, the URA calculated the tax liability at Shs 1.5 trillion ($409.1 million). However, following further audits and more consistent interpretation of business rules, the figure was reduced to Shs 260 billion.

MTN Uganda’s CEO, Sylvia Mulinge, warned that if the tax assessment is enforced, it would severely impact the telecom’s operations, limit its contribution to Uganda’s economy, and potentially damage investor confidence in the country.

MTN has consistently maintained that its revenues are accurately reported, independently audited, and fully tax-compliant. In August 2024, the company reiterated its position, asserting that it has adhered to all regulatory requirements.

However, a source close to the dispute alleges that MTN Uganda has failed to remit billions of shillings in taxes collected from various sectors of the population, including rural residents, boda boda riders, and family members making phone calls. The source questioned why the government continues to borrow funds from foreign banks for infrastructure development while MTN Uganda allegedly withholds tax payments.

“MTN is a collector of taxes levied by the government. What the company did was collect the money but failed to remit it. They must fulfill their tax obligations,” the source concluded.

The outcome of this dispute remains critical, as it may set a precedent for how large telecom operators in Uganda handle their tax responsibilities moving forward.