Uganda: Finance Ministry Warned Govt of Huge Losses Due to Internet Shutdown

20 January 2021


Finance Ministry warned government of massive losses resulting from Internet shutdown.

In a January 18 letter, Finance Ministry permanent secretary and secretary to Treasury Patrick Ochailap, warned Prime Minister Ruhakana Rugunda of massive cross-cutting losses, which included defaulting on debt repayments and other international obligations.

"... will definitely lead to substantial revenue and business losses in the economy, besides government defaulting on statutory obligations," Mr Ochailap wrote, drawing the Prime Minister's attention to "the crippling effects of Internet lockdown on Treasury operations, financial sector and business sector".

Government, on January 13, shutdown the Internet on the eve of the presidential and parliamentary election, citing fears that unnamed individuals had planned to mobilise protests in the event that the elections are not declared in their favour.

However, government restored the Internet on the same day the letter had been written after five days of shutdown but has maintained a blockade on some social media sites.

Mr Ochailap had said in his letter that apart from not paying all government obligations, banks could not make normal banking transactions in addition, noting that Uganda Revenue Authority could not as well transmit to the Consolidated Fund through the normal banking system.

He also noted that the shutdown had collapsed government's capacity to process pensions, salaries and wages as well as hindering businesses from filing value added tax returns and or remit tax payments.

Demand for compensation

The five-day shutdown affected more than 16 million Internet users, however, according to telecoms and other Internet Service Providers, it is still difficult to assess the extent of the loss, especially to data subscribers.

A number of Ugandans have, through different platforms, asked telecoms and government to compensate them for data and OTT that they had allegedly paid for but was lost during the five-day shutdown.

Yesterday, some telecoms, including MTN had started reimbursing users, amid increasing requests for compensation.

Ms Rhona Arinaitwe, the MTN senior manager communications, told Daily Monitor the compensation was ongoing but was only applicable to those that had valid data bundles that had gone into expiry during the period of the suspension.

Uganda Revenue Authority (URA) on the other hand said there was no provision for compensating for lost Over the Top Tax (OTT).

"It is not in the law. It is not provided for. It is tax already paid," Mr Ian Rumanyika, the URA manager public and corporate affairs, said.

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