[kictanet] The burden of taxing ICTs

[Barrack Otieno]

Where did the rain start beating us?, we used to manufacture phones at
Gilgil Telecom Industries, what happened to e-Mado?, indeed we need to
study the pros' and cons of taxation on the technology sector.
Probably we need a deliberately structured approach of introducing and
managing the tax regimes  to safeguard and nature the growth of the
technology sector. The banking industry exploded when banking fees
were reduced. One of the factors that made Mpesa Juicy was the low
transaction costs compared to what banks were offering. Just drawing a
laymans correlation.

Best Regards

On 11/13/14, Ngigi Waithaka via kictanet <kictanet at lists.kictanet.or.ke> wrote:
> Listers,
>
> Taxation is *always* a double edged sword. In this instance, we would have
> to ask ourself what is the *NET* effect we want to achieve with the
> taxation?
>
> As an example, our current and previous tax have been to increase ICT
> usage, at all costs. Lower the taxes and all the computers and software
> will become very cheap and affordable and ICT industry can take off.
>
> However, that in my view doesn't have the necessary depth.
>
> Take for example the local industry, every time you lower the taxes, and
> especially import taxes, you make it that much harder for your local
> industry to grow as it immediately faces stiff competition from the global
> players. Your market becomes the dumping ground for every multi-national
> who sell their products to your market cheap, and then immediately take off
> with all the profits without re-investing in the local economy.
>
> Taxation can and should address that.
>
> If you look at the policies of most of the developed nations, one thing at
> the center of their taxation policy is ensuring their local industries
> thrive and force outsiders on the very least to consider moving their
> manufacturing to their markets as that creates jobs and also leads to
> knowledge transfer. A good example of this, it is not by chance that most
> Japanese car manufacturers in the US have manufacturing plants in the US,
> policy (including taxation) forces them to.
>
> Also it is not a coincidence that there are hardly any US cars bought in
> Japan (
> http://americanautocouncil.org/sites/default/files/Japans%2BProtected%2BAuto%2BMarket.pdf
> )
>
> Now, we could ask, what have our current taxation policies brought us:
> 1. High consumer usage of ICT
> 2. Non-Existent local high-technology sector (we wouldn't built our own
> Huwaei's, Motorolas, Samsungs as these multi-nationals are able to import
> goods into our markets with almost no taxation, hence making it almost
> impossible for a local to challenge them)
> 3. Non - existent high technology export (if we do not have local firms
> that can build technology solutions, we have nothing to export)
> 4. Engineers(Electronics, Electrical, Industrial Design) who have no places
> to work since there are not enough local firms that could use their
> core-services (and repairing broken fibre links is not what one spends
> 5years learning electronics in campus to do)
>
> So we will remain a country of high ICT consumerism while being a dwarf in
> technology.
>
> Regards
>
> On Wed, Nov 12, 2014 at 5:36 AM, Ali Hussein via kictanet <
> kictanet at lists.kictanet.or.ke> wrote:
>
>> Listers.
>>
>> Interesting article.
>>
>> KITOS, hope you are listening...
>>
>> Kenya has in the past few years showed promise of renewed innovative
>> capacity, especially in the Information Communication Technology (ICT)
>> sector.
>>
>> But the new tax regime precipitated by the East African Community (EAC)
>> tax harmonisation is about to reverse all the gains we have made thus
>> far.
>>
>> Read on
>>
>>
>> http://www.nation.co.ke/oped/blogs/dot9/ndemo/-/2274486/2516562/-/1xv3f7z/-/index.html
>> *Ali Hussein*
>>
>> +254 770 906375 / 0713 601113
>>
>> Twitter: @AliHKassim
>>
>> Skype: abu-jomo
>>
>> LinkedIn: http://ke.linkedin.com/in/alihkassim
>> <http://ke.linkedin.com/in/alihkassim>
>>
>> Blog: www.alyhussein.com
>>
>> "I fear the day technology will surpass human interaction. The world will
>> have a generation of idiots".  ~ Albert Einstein
>>
>> Sent from my iPad
>>
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>
>
>
> --
> *Regards,*
>
> *Wait**haka Ngigi*
> Chief Executive Officer | Alliance Technologies | MCK Nairobi Synod
> Building
> T + 254 (0) 20 2333 471 |Office Mobile: +254 786 28 28 28 | M + 254 737 811
> 000
> www.at.co.ke
>


-- 
Barrack O. Otieno
+254721325277
+254-20-2498789
Skype: barrack.otieno
http://www.otienobarrack.me.ke/