Message-ID: <bf1_9512120311@permanet.org> Date: Tue, 12 Dec 1995 09:05:21 -0500 From: shem <mailto:shem@ARCC.PERMANET.ORG> Subject: African and the Internet (fwd) To: Multiple recipients of list DEVEL-L <mailto:DEVEL-L@AMERICAN.EDU>
* Original to: mailto:afrik-it@irlearn.ucd.iecc: mailto:afrik-it@irlearn.ucd.ie, kenya-net@afrique.com, wg94-l@uku.fi, arccnet cc: mailto:kci-net@media.mit.edu
Dan writes:
> countries would
> reduce duty and VAT it would lead to a proliferation of
> technology. (I might
> note that Kenya has reduced duty & VAt to 10 & 15%) much
> better - I am sure
> only because the IMF demanded it tho'
I do know there are a couple of things Governments, especially 3rd world Governments, do under the pressure of IMF, etc, but I doubt this was the major reason taxes on IT products were lowered in Kenya. The story started about three years ago when taxes stood at 45%, and is well documented. About two years ago, the local IT industry (comprising major vendors, trainers, telecom firms, bureaus) and spearheaded by the national computer society (then called Kenya Computer Institute, KCI) made a spirited effort with contacts at the highest offices in the Ministry of Finance (which handles taxes), pleading for review of taxes. The climax was the annual KCI dinner at which the Minister officiated through his deputy - who has since remained our "interceder" within the Ministry. The major request to the Minister was the need to review tax, and see IT as an essential instrument of production. He promised to look into it along with his tax experts. Barely 3 months later was budget day, and sure enough taxes were slashed from 45% to 20%. The IT industry received this with great joy, and the working together with government to popularize IT intensified even the more.
Then came 1995. Between Feb and June (budget month), the core lobby group that spearheaded the campaign had intense dialogue with this Ministry again (and also this time with the Ministry of Education), and this time championed by what had become to be called the Computer Society of Kenya (CSK, formerly, KCI).
A series of very high-level discussions ensued, culminating in a very comprehensive proposal that the "lobby group" (if you want to call it) was instructed to draft - which is available on request. That document addressed a number of issues, among them taxes. Our request was that taxes be lowered from 20% to 5% on IT products. The Ministry of Education - again at the highest level - supported us, saying if we couldn't be offered this for everyone, let it be done to educational institutions. Come budget speech, taxes were lowered to 10% - a good enough mid ground.
It may be noteworthy that during the 1993/4 tax reduction, students returning from overseas too were allowed to bring in one PC and peripherals (printer, modem, etc) duty free. And also, as it stands now, educational institutions are entitled to bring in IT products wholly duty free, although there is an application process for excemtion they have to go through.
At 10%, Kenya is today one of the least "computer-taxed" countries in Africa, perhaps only higher than Mauritius where tax is not only nil, but Govt gives 40% incentive (20% grant, 20% secured loan - so I am told) for non-profit organizations and educational institutions to procure computers, and it is policy for every secondary school to have at least 5 PCs.
Apart from the customs tax, VAT in computers in Kenya were also lowered from 18% to 15%. Clearly, the "lobby and dialogue" could not end there. Various other discussions have since taken place. For those closely following the Kenya IT field, only about a month ago, there was a historic half-a-day seminar for Hon. Parliamentarians (Parliament is the supreme body on land) - opened by the Hon. Minister for Research, Technical Training and Technology (where IT falls). Indeed, during that seminar, an opposition MP questioned the wisdom of lowering taxes on computers and denying Govt of revenue. Most of the major players in local IT scene were there on hand to comprehensively explain the potential benefits to the law makers, who left very much sensitized in IT, with a promise to make the seminar just the first step. The idea was to try to bring IT on top of our national development agenda.
Barely 2-3 weeks later was Kenya's first national IT conference and exhibition, which was also historic - seeing more than 160 distinguished participants from about 15 countries (about half of them African); such an audience has never been known in our history gathering "just" to discuss computers!
More are in the pipeline. Indeed, a number of very senior policy makers are privately going through IT sensitization programmes. A number have already procured laptops, and occasionally our trainers (ARCC trainers) look for them wherever they are playing golf so that they can do some wordprocessing, accounting or email. On an experimental basis, even some very senior officers in charge of taxes are trying out to see what we would benefit in factual terms if the technology (esp cyberspace) was widespread.
In short, Govt hasn't been insensitive to the plight of the local IT industry. Indeed, at some stage, attention of the lobby group turned from IT in general to telecom, and there have been intense behind-the-scenes dialogue. Since this is still very sensitive, and dialogue still going on, if one is terribly interested, feel free to contact me in private.
Of course we need the support of IMF, the Bank, etc, but I believe the initiative must come from within. And this is my challenge to other African countries, as well as other developing communities of the world.
Shem Ochuodho (Chairman, Computer Society of Kenya) Director, African Regional Centre for Computing (ARCC) Ngong Road, Opp. Ngong Hills Hotel P.O. Box 58638, NAIROBI, Kenya Tel: (254-2-) 723552/726914/727810 Fax: 728351 Email: mailto:shem@arcc.or.ke or shem@arcc.permanet.org