[kictanet] The burden of taxing ICTs

Thu Nov 13 12:06:40 EAT 2014

Thank you for the data Ngigi. I have indeed also found some good info (did
some very quick reading). To copy paste from the excerpt you provided:

*The UK and the USA may be the more dramatic examples, but almost all the
rest of the developed world today used tariffs, subsidies and other means
to promote their industries in the earlier stages of their development.
Cases like Germany, Japan, and Korea are well known in this respect. But
even Sweden, which later came to represent the small open economy to many
economists had also strategically used tariffs, subsidies, cartels, and
state support for R&D to develop key industries, especially textile, steel,
and engineering. *

It is a known case that for instance economies of scale work to the
advantage of countries like China and other giants. From the excerpt
extract above, it explains how these economies invested in themselves and
implemented the 2 major components I earlier mentioned: Policy frameworks
and Civilian Frameworks.

The case being I am not making an argument that we can compete, but we can
take these steps to reach there. And before we reach there we need to
invest in R&D, provide subsides, come up with cartels, have support
frameworks and implement a strategic plan for 5 to 10 years. After which,
we will be in a position to develop our own solutions to our own problems.
Its not an easy thing, but it is achievable.

The countries we import from did not wake up and get to where they are at
by luck. They did exactly what the excerpt mentions. And that is what we
need to foster. And if we have taxes impeding technology growth, its no
longer a steep mountain to climb. It becomes a cliff.

On Thu, Nov 13, 2014 at 11:58 AM, Ngigi Waithaka <ngigi at at.co.ke> wrote:

> Ahmed,
>
> It is that we are at an infant stage in technological development, while a
> few other countries are at the maturity stage. While we count our Facebook
> / Twitter users as technological achievement, a few countries are landing a
> spacecraft 500Million KMs away on a comet.
>
> So its no surprise that if we go head on with them, we will most certainly
> lose.
>
> I urge you to read a book such as this
> http://www.amazon.com/exec/obidos/ASIN/1843310279/qid=1030373453/sr=2-1/ref=sr_2_1/103-6106433-7539046
> which tries to explain how the rich countries got to where they are and
> what they are doing to maintain the status quo.
>
> A shorter version of this is found here
> http://www.paecon.net/PAEtexts/Chang1.htm
>
> Rgds
>
> On Thu, Nov 13, 2014 at 11:16 AM, Ahmed Mohamed Maawy <
> ultimateprogramer at gmail.com> wrote:
>
>> Ngigi,
>>
>> The fact that a phone from far east (imported from a mass market
>> producer, with shipping costs, thousands of miles away) could cause a local
>> plant not to operate is really not a good indication for us. Again, it is
>> not the taxation policy. Its really about what we need to do as a country
>> to support innovation. And its not only at the policy level, its also in
>> the civilian level.
>>
>> Ahmed
>>
>> On Thu, Nov 13, 2014 at 11:06 AM, Ngigi Waithaka via kictanet <
>> kictanet at lists.kictanet.or.ke> wrote:
>>
>>> Barrack,
>>>
>>> The rain started beating us when instant gratification became more
>>> important than our long-term health. The rain started beating us when the
>>> metrics for our success became how many users we have on Twitter, Facebook,
>>> Google, MSN as opposed to how many of our products & services are being
>>> sold and used in the US, UK, Germany and such markets.
>>>
>>> I like your example of the Gilgil Telecom plant. Tell me, what would
>>> have happened if we had made it as policy that any phone to be sold in the
>>> market for less than 20K had to be manufactured / assembled at the Gilgil
>>> plant under license?
>>>
>>> Maybe Samsung, would have balked at the idea, maybe Nokia would have as
>>> well, but I can bet you one current phone manufacturer would have taken up
>>> the offer. We would have maybe started with really ugly phones (wait, we
>>> all started with big ugly phones), but you could bet by now, that firm most
>>> likely would be manufacturing competitively for the local market as well as
>>> EA market and maybe internationally as well.
>>>
>>> But, what did we do instead? Over cocktails, graced by most major global
>>> telecom executives, we announced to the world that anyone and their
>>> 'grandfather' can import phones to our market.; lets open up our markets,
>>> lets remove all taxation.
>>>
>>> What did we get in return a million users on Facebook, Twitter, Gmail
>>> and our only phone manufacturing plant closed down for good.
>>>
>>> That is 'progress', African style.
>>>
>>> Rgds
>>>
>>>
>>>
>>> On Thu, Nov 13, 2014 at 10:33 AM, Barrack Otieno <
>>> otieno.barrack at gmail.com> 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
>>>> >>
>>>> >> _______________________________________________
>>>> >> kictanet mailing list
>>>> >> kictanet at lists.kictanet.or.ke
>>>> >> https://lists.kictanet.or.ke/mailman/listinfo/kictanet
>>>> >>
>>>> >> Unsubscribe or change your options at
>>>> >>
>>>> https://lists.kictanet.or.ke/mailman/options/kictanet/ngigi%40at.co.ke
>>>> >>
>>>> >> 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
>>>> >
>>>>
>>>>
>>>> --
>>>> Barrack O. Otieno
>>>> +254721325277
>>>> +254-20-2498789
>>>> Skype: barrack.otieno
>>>> http://www.otienobarrack.me.ke/
>>>>
>>>
>>>
>>>
>>> --
>>> *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
>>>
>>>
>>>
>>> _______________________________________________
>>> kictanet mailing list
>>> kictanet at lists.kictanet.or.ke
>>> https://lists.kictanet.or.ke/mailman/listinfo/kictanet
>>>
>>> Unsubscribe or change your options at
>>> https://lists.kictanet.or.ke/mailman/options/kictanet/ultimateprogramer%40gmail.com
>>>
>>> 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
>>
>
>
>
> --
> *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
>
>
>

-- 
*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
-------------- next part --------------
An HTML attachment was scrubbed...
URL: <https://lists.kictanet.or.ke/pipermail/kictanet/attachments/20141113/2cc84d92/attachment.htm>