[kictanet] The burden of taxing ICTs

Thu Nov 13 10:52:18 EAT 2014

Ahmed,

Dumping does not necessarily imply low quality.

As an example if we open our Sugar importation markets and Zero Rate import
duty on Sugar imports, it doesn't mean we will get low quality Sugar from
Brazil/Egypt, but there is a chance in short order all the Sugar factories
in our western belts will close shop in short order.

The Huwaei Ideos is not a bad phone, but maybe its introduction to the
market market signed the death warrant for the Gilgil phone manufacturing
plant.

So what we did is open up our technology importation to anyone who has
anything to offer in ICT and I hope we don't get surprised that in 10-20
years we wouldn't have any solid technology industry to talk about.

Rgds

On Thu, Nov 13, 2014 at 10:40 AM, Ahmed Mohamed Maawy via kictanet <
kictanet at lists.kictanet.or.ke> wrote:

> My 2 cents on the dumping ground issue:
>
>    1. It is more of an import workflow issue than it is a taxation issue.
>    By import workflow this means that are we really evaluating if the products
>    that get to market have the quality assurance? For instance e-waste control
>    policy is a mechanism that has worked.
>    2. So has it been a dumping ground for things that have revolutionized
>    the market in positive ways. When Huawei IDEOS came in we were amongst the
>    first countries to benefit. More and more people started adopting smart
>    phones and connecting to the grid, which to me is a huge market space
>    created for small to medium enterprise businesses to scale applications and
>    do more business. This was actually much better for the economy. And let us
>    admit it, that phone had and still has good quality feedback from people
>    who have bought it.
>
> Ahmed
>
> On Thu, Nov 13, 2014 at 10:33 AM, Barrack Otieno via kictanet <
> kictanet at lists.kictanet.or.ke> wrote:
>
>> 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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>> >>
>> >> The Kenya ICT Action Network (KICTANet) is a multi-stakeholder platform
>> >> for people and institutions interested and involved in ICT policy and
>> >> regulation. The network aims to act as a catalyst for reform in the ICT
>> >> sector in support of the national aim of ICT enabled growth and
>> >> development.
>> >>
>> >> KICTANetiquette : Adhere to the same standards of acceptable behaviors
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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/
>>
>> _______________________________________________
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>>
>> The Kenya ICT Action Network (KICTANet) is a multi-stakeholder platform
>> for people and institutions interested and involved in ICT policy and
>> regulation. The network aims to act as a catalyst for reform in the ICT
>> sector in support of the national aim of ICT enabled growth and development.
>>
>> KICTANetiquette : Adhere to the same standards of acceptable behaviors
>> online that you follow in real life: respect people's times and bandwidth,
>> share knowledge, don't flame or abuse or personalize, respect privacy, do
>> not spam, do not market your wares or qualifications.
>>
>
>
>
> --
> *Ahmed Maawy*
> Executive Director - M-Power (CBO)
> Shaper - Global Shapers
> Ambassador - Open Knowledge
> Director - Startup Grind Mombasa
> Software Developer - Volo Broadband
> (KE) +254 714 960 627
> Skype: ultimateprogramer
>
> m-power.or.ke
> www.globalshapers.org <http://globalshapers.org/>
> www.okfn.org <http://okfn.org/>
> startupgrind.com
> www.volobroadband.com
>
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>
> The Kenya ICT Action Network (KICTANet) is a multi-stakeholder platform
> for people and institutions interested and involved in ICT policy and
> regulation. The network aims to act as a catalyst for reform in the ICT
> sector in support of the national aim of ICT enabled growth and development.
>
> KICTANetiquette : Adhere to the same standards of acceptable behaviors
> online that you follow in real life: respect people's times and bandwidth,
> share knowledge, don't flame or abuse or personalize, respect privacy, do
> not spam, do not market your wares or qualifications.
>

-- 
*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
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