Operators upbeat on tax waiver


Image: By BiztechAfrica
Operators upbeat on tax waiver

By Omondi Julius Odera, Kampala, Uganda

The Ugandan digital TV sector has welcomed the government’s decision to waive the 25% import duty on set top boxes (STB) for a year. This development was announced in the recent financial budget 2012-2013 by the Minister of Finance, Maria Kiwanuka.

“The government through Ministry of ICT, UCC, NITA-U, initiated the idea (tax waiver) on behalf of Government. It is aimed at stimulating the switch from analogue to digital,” noted public relations officer of ministry of ICT David Kiirya.

The decision is a relief to the stakeholders in the industry.

Multichoice Public relations officer Tina Wamala said: “We were very much encouraged by the Government’s decision to remove taxes on Set Top Boxes. This one-year waiver will allow us to save money which we can use to make further investments in our business, including infrastructure development, technological advancements and customer care process improvements aimed at further augmenting our product and service offering to our subscribers.”   

The same views are shared by Star Times Digital Television Marketing manager Simon Arineitwe, “Obviously there's a relief as per the budget, because import duty was 25%. Cutting this ultimately has a substantial effect on the market price. He also notes that it is the right timing when the country is undergoing the implementation phase of its digital migration.

The move is aimed at enabling the masses to buy the set top boxes at a reduced price. Currently, the STBs range from UGX 60,000-250,000. However, the government will not compel the operators to sell the set top boxes at a specific price.

The operators are upbeat about the tax waiver and are already promising a better deal for customers.

“Our customers should expect the best offers on the market plus an excellent customer service”, notes Arineitwe. Multi choice’s Tina notes, “This move will have a very positive effect on the industry and help stimulate uptake of digital technology among the masses because the tax waiver will give us the operators the opportunity to reduce our prices to the end users.”

She also commends the government for the move noting: “The tax waiver demonstrates to us the operators that the Government understands the country’s need to honor its regional obligations and the importance of the digital migration to the entire economy which is the reason the (STB) tax waiver is one of the few that has been introduced this financial year. 

The operators, however, fault the government for the time frame of the tax waiver on STB noting that the one year period is very short. Tina explains: “The tax waiver period though (one year) is very short ideally we would have wanted the Government to remove taxes on STB for a lot longer so as to ensure as many people as possible would be able to enjoy the benefit; you see there are only a given number of decoders that we the operators can import into the country every year yet the number of televisions households is far greater and growing steadily.”

She adds that global demand for STB is currently very high, and ideally this tax waiver should be kept in place till 2016 well after the Global migration deadline elapses.

Digital migration is a process during which services that operate on analogue network are transferred across to digitally based network over a specific period of time.

The main purpose of the migration process is to ensure that all services operating on the analogue network will be fully replicated on the digital network with the aim to switch off the analogue services at a specific point in time.  

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