The Cabinet Secretary for Treasury Henry Rotich has announced the 2019/2020 Budget that has sparked talks across the nation. The Budget is Kenya’s biggest yet, and has increased taxes for the betting and lottery industry, alcohol and cigarette manufacturers, although the ICT sector, primarily companies involved in the assembly of motherboards will see tax exemptions geared toward making the nation a key player in assembly of computers.
“Mr. Speaker, Kenya is positioning herself as a leading assembler of electronics and computers within the region. This development initiative will transform Kenya into a major manufacturer and supplier of electronics and computers in the East Africa Community. Mr. Speaker, in order to encourage the growth of this sector, I propose to exempt from VAT locally manufactured motherboards and all inputs used in their manufacture. This will make them more competitive against imported motherboards,” said Mr. Rotich.
A diversity of taxes has previously been imposed on technology firms operating in the digital space in the country. Some of these taxes include corporate and VAT, in addition to import duties that are generally imposed on all types of digital equipment, whether they are consumer-oriented such as computers and smartphones or required by operators such as servers.
This development should offload financial burden on local firms that specialize in the assembly of computer devices. Over time, we will see if the exemption will be impactful in terms of job creation, ICT adoption and overall digitization as the government pursues the use of ICT services in its operations.
