URA Temporarily Shuts Down K2 Telecom Over UGX95.8 Million in Debts

Government revenue collection agency; the Uganda Revenue Authority (URA) on Wednesday temporarily shutdown Buganda Kingdom’s owned K2 Telecom over failure to remit pay as you earn (PAYE) and local excise duty amounting to nearly UGX96 million.

According to Ian Rumayika, the manager public and corporate affairs at URA who confirmed the closure, says it follows default on its tax obligations for the last four years.

“K2 telecom has a debt of PAYE amounting to over UGX77.8 million and of course, it also has a debt of local excise duty, UGX17 million. In total, it is about UGX95.8 million,” Rumayika said.

K2 Telecom established in January 2013 is estimated to have at least 200,000 subscribers with its current Chief Executive; Jessica Nanyonga – offering them voice calls, SMS and internet data services.

However, according to reports by the Daily Monitor, states that K2 telecom hasn’t been on air since the beginning of the year given a billing dispute with Africell, which had become its new host after Orange exited the market. For those unaware, the telco had multiple challenges that forced them to have Orange host its operations. After Orange telecom existing the market here in Uganda, all the K2 telecom operations were handed over to Africell as their new host.

“We experienced some over billings which we could not bear and this forced us to halt operations,” said Noah Kiyimba, the Buganda kingdom information minister.

He further told the Daily Monitor that the telco were in negotiations with Africell to have the telecom back on air pending completion of discussions with Uganda Communications Commission (UCC).

However, Executive Director at UCC Godfrey Mutabazi said the telco will have to first furnish the regulator with a way forward even after resolving the tax issue.

“They must clear because you are not supposed to be closed like that when you are an operator,” he said.

Notably, we’ve reported a number of issues regarding telecoms facing liquidation. Early this month Afrimax Group, which received rights to operate under the global Vodafone brand pulled out its deal, which forced the company (Vodafone Uganda) to shut down amidst UGX300 billion debt. While on the other hand, Uganda Telecom had up to May 26th to find a new investor. However, there hasn’t been any reports regarding this issue.

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