Host Net Uganda Limited has petitioned the Constitutional court to stop Cabinet's decision to have money collected from communications companies remitted to the consolidated fund.
Uganda Communications Commission (UCC), the sector regulator, imposes a two per cent levy on the gross annual revenue of operators licensed under the Uganda Communications Act. Government now wants half of that revenue into its coffers.
Respondents in the suit are the attorney general and UCC. In its petition, Host Net, an information and technology firm, statesthat Cabinet's decision is forbidden by the Constitution, since it was not part of the financial year estimates in the 2014/15 national budget.
The company says such a move is inconsistent with Articles 2, 111, 153 and 155 of the Constitution. The suit comes at the heels of a fight between UCC and the Finance ministry over the same money. In a recent interview with The Observer, Godfrey Mutabazi,UCC's executive director, described the move as not "wrong" but "constitutionally untenable".
"This is a special fund that can only be utilised within the ICT sector," he said.
Mutabazi argued that diverting the money would cripple UCC's operations in facilitating and promoting the development of Uganda's communications sector. Through Muwema and Mugerwa Advocates and Solicitors, Host Net asserts that UCC is mandated to collect the said levy and put the money into a specialised fund to develop the ICT sector.
The petitioner contends that the fund has now grown to the tune of Shs 30bn per annum.
"The ICT sector has hardly received any funds from the consolidated fund," the petition reads in part. "Monies from the said UCC fund have increased universal access to communication services in Uganda by funding network enhancement expansion activities like internet pops, public pay phones, school and health ICT, laboratory facilities, and internet cafés."
Host Net claims a bill to operationalise the cabinet's decision has been drafted.
"The parliamentary finance committee is now sitting to consider the said bill for enactment of the Financial Act 2014," the petition states, adding that such conduct is unconstitutional.
"The UCC levy forms part of the fund to be used for development of ICT in Uganda and therefore the said decision will lead to the deprivation of property under Article 26 of the Constitution," Host Net states.
It also said that justification given by Keith Muhakanizi, the secretary to the Treasury, that the money had to be remitted to the consolidated fund as "means of pooling together public funds for economic growth",was illegal and not authorised in the Constitution.
Ministry of Finance publicist Jim Mugunga said the law gives them powers to manage all government revenues and "the ministry is being courteous to say that they can use the 50 per cent."
Before the main petition is heard, Host Net wants court to issue a permanent injunction restraining the respondents, or their agents, from remitting the money to the consolidated fund.