Parliament approves ban on airtime scratch cards

Move to cashless economy

PARLIAMENT | Ugandan Parliament on Tuesday approved a ban on airtime scratch cards, a decision that means that mean loading airtime on mobile phones will now only be possible electronically.

Consumers can now only load airtime using Easy Load, mobile money, Me2U, Payway, among other electronic means.

The move was proposed by government in March this year and sector players given up to July 31 to phase out the scratch cards.

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The Minister of Information Technology and Communication, Frank Tumwebaze was in Parliament to convince lawmakers to agree on the ban for all mobile telecoms in the country.

The Crime24 Parliament correspondent Ritah Mugoya reports that lawmakers endorsed the ban on grounds that it is part of government steps to curtail abuse of mobile phones by criminal elements.

Tumwebaze said traders had been given ample time to phase out scratch cards by July 31, 2018.

“Mobile operators have already put in place a system to facilitate conversion of any unutilized scratch cards into mobile money. Through this system, no customer will lose money. They will be refunded for any unutilized air time cards,” Tumwebaze said.

He further told parliament that telecom companies are working with their agents and distributors across the country to ensure a seamless transition from the old system to the new system.

On accessibility fears as raised by MP Paul Akamba (Busiki), the minister said all areas were covered by electronic top up systems.

Besides raising revenue for the government, the minister said the move would also create more opportunities through formalized airtime distribution.

It will improve revenue assurance by Government, since with the electronic system, Uganda Revenue Authority can determine the amount of airtime sold by telecom operators and agents and thus rule out any tax under declarations,” Tumwebaze said.

Air time scratch cards are a cost to the provision of communication services in Uganda.

It involves the cost of manufacture, importation and distribution which increases the overall cost of doing business.

In addition, the paper scratch cards are manufactured outside Uganda, and add onto the country’s importation bill thereby facilitating capital flight.

With the new electronic recharge system, it will rationalize all associated costs in the distribution system and mitigate both importation of scratch cards and capital flight to some extent, according to experts.

Electronic recharge system is also part of efforts to encourage digital transactions.

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