KAMPALA – MTN Uganda Group has called for a review of the taxation policy for digital money transitions, specifically the charge on the withdrawal of cash at mobile money agents’ outlets.
In 2018, the government introduced four levies on digital services including mobile money transactions, causing a public uproar that the policy was antidevelopment and would affect financial deepening in the country.
In 2021, the policy was revised to allow taxes on the withdrawal of cash from agents, and this was also revised from one per cent to 0.5 per cent of the transaction fees by the company.
While retaining the cash withdrawal levy, the government argued that it was aimed at discouraging the conversion of cash from digital to paper, and encourage the drive to a ‘cashless economy.’
Speaking at the second annual general meeting since its listing on the Uganda Securities Exchange, Chief Executive Officer, Sylvia Mulinge pledged to continue pressing the government to remove the tax that she termed punitive’ to the Ugandan consumers who use mobile money services.
Mulinge said it was an unfair tax considering that other digital money business players were not affected by the tax that targets mobile network operators. She also urged the government to work on the taxes on mobile gadgets especially smartphones to cut down prices and improve market penetration.
Mulinge said they will work with international companies to attract smartphone assembling in the country, which would also reduce on their importation.
The Group’s annual profit after tax rose 20 per cent to Ugx491bn during the year under review.
During the AGM, shareholders voted and approved the Ugx5.5 per share as dividend for the first quarter of this year, which brings the total annual dividend for the past one year to more than Ugx15 per share.
The Chairman of the Board Charles Mbiire announced that the total of Ugx123.1bn to be paid out to the shareholders next month, resulted from their performance.
Andrew Bugembe, the Chief Finance Officer said they will continue paying out dividends three times a year, and maintain the policy of paying out a dividend equivalent to least 60 per cent of their earnings.
Bugembe also described their performance that show a growth of 11 per cent in revenues, as commendable considering the economic environment that characterised the year.
Growth was mainly driven by the growth in the number of subscribers, which the company put at Ugx17.8m as of the end of March 2023.
The growth, however, is being affected by the continued slowdown in voice revenues unlike in the data and mobile money segments.
Bugembe said that considering that 2022 was the first full year the economy was fully opened; the performance was commendable.
During the AGM, concern was raised regarding the value of the shares on the stock market, which have dropped to 165 shillings per share, from the Initial Public Officer (IPO) price OF Ugx200.
On the day of first trading in December 2021, the price went up to Ugx205. The concern was whether it was really true that the company was making profits, or if so, why the price was falling.
Bugembe explained that the underperformance of the share was not because of the profitability of the company, but other market forces.
MTN Uganda is currently the second most valuable stock on the USE with a market capitalisation of Ugx3.7trn, or about 20.6 per cent of the entire size of the Uganda Securities Exchange market.
On Thursday, it closed trading at Ugx165 per share on the USE, meaning that it had lost about 8.33 per cent since the year began.
Over the past three months, it has been the third most traded stock with 16.9 million shares worth Ugx2.86bn traded.
Mulinge hoped that the economic situation would continue improving from last year, which was characterised by high inflation, high fuel prices, high foreign exchange rates, among others, which she says, affected consumer spending power.
As part of the efforts to increase public participation in the stock market, the company, together with the Uganda Securities Exchange launched the improved e-trading platform, where now most of the trading activity can be done on the mobile phone.
The platform now also allows that shareholder to check their last five transactions done on their accounts.
USE Board Member, Rachel Mindra Katorogo noted that they expected this to power, not only the MTN share trading activities, but all the stock market growth.
