UCC lacks capacity to verify revenue declaration by telecom companies: Auditor General

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[/blockquote]Every year, when telecommunication companies in Uganda submit their financial statements, they are expected to remit 2 % of their revenue to the Uganda Communications Commission (UCC). But, if a new report from the Auditor General’s office is to be believed, the commission lacks capacity to monitor and verify revenue declaration submitted by the telecoms. This has lead to the loss of the much-needed revenues.

According to the Daily Monitor, Mr John Muwanga, the Auditor General, revealed in the 2014/15 report that the commission has not yet built capacity to independently verify the revenue figures reflected in the operators’ audited financial statements to counter the likelihood of audit risk or collusion. On the 2% revenues received by the UCC, the commission retains half of the proceeds for its operations and the other half is remitted to the Consolidated Fund, but the report indicates that due to the capacity failures at UCC, the telecos could be cheating the commission and underpaying them.

UGX 20 Bn budget shortage

The report also unearthed the fact that UCC collected UGX 20.3 billion less than it had budgeted, which meant some of its plans could not be completed in financial year 2014/15. Of the UGX 104.6 bn it had expected to collect, UCC had actual revenue of UGX 84.3 bn by the end of June 30, 2015. These variations could be due to unrealistic budgeting and/or inadequate implementation of collection strategies according to the Auditor General’s report.

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To justify these shortages, the report claims that this is due to increased use of fiber optic cables by internet service providers, the untouchable Uganda Telecoms (UTL) which has failed to pay over UGX 13 billion in licensing fees to the commission, the One Network Area which reduced rates on call to Rwanda and Kenya, introduction of excise duty on international calls and lack of interest earnings from anticipated fixed deposits on idle funds. How do you think UCC can arrest this revenue loss, leave us your comments below.