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Kenya mulls tax incentives to spur growth of ICT manufacturers

NAIROBI (Xinhua) -- Kenya is considering putting in place a raft of tax incentives to spur growth of information and communication technology (ICT) manufacturers, officials said on Wednesday.

Jerome Ochieng, principal secretary in the ministry of ICT, told a media briefing in Nairobi that Kenya is prioritizing the development of the ICT industry because it is an enabler for all sectors of the economy.

“We are currently in talks with the ministry of industrialization and the national Treasury to reduce taxes for firms who set up ICT-related manufacturing plants in the country,” Ochieng said during a CEO forum for companies implementing President Uhuru Kenyatta’s Big Four Agenda on affordable housing, universal health care, food security, and manufacturing.

He said two local companies are assembling laptops for use for the countryh’s digital literacy project.

The government is in discussion with the two computer assembling firms to support them expand their operations so that Kenya can become an ICT regional manufacturing hub, Ochieng added.

He said Kenya is planning to attract global ICT manufacturing firms to move their operations to Kenya to take advantage of the large pool of skilled workers.

The value of the ICT sector in 2017 was approximately 3.45 billion dollars, making its contribution to the gross domestic product (GDP) to less than 5 percent of the economy’s output, Ochieng said.

A robust ICT industry will help to expand the digital economy, he said.



Kenya’s industrialists mull taskforce to advise on tax policies

NAIROBI (Xinhua) -- Kenyan industrialists have called for an industry-led taskforce to advise on people-driven public expenditure, debt and taxation policies, including industrial measures, to drive competitiveness for the manufacturing sector.

The Kenya Association of Manufacturers (KAM), which held a public forum in Nairobi, also called for the need to develop clear-cut strategies to provide linkages between national and county government budgets for better synergies.

KAM vice chairman Mucai Kunyiha said it is crucial for the government to develop policies aimed at driving the competitiveness of industry at both local and global markets.

“The new tax measures do not sync with the spirit of the Big 4 Agenda. An increase in the cost of doing business renders the local environment hostile to investments and derails any growth prospects of existing projects and planned expansions,” he said in a joint statement issued on Wednesday.

The move came after the Treasury introduced new tax measures aimed at increasing its revenue collection, including an 8 percent VAT on fuel, excise duty on fees charged for money transfer services, excise tax on sugar confectionery, and anti-adulteration levy on all illuminating kerosene.

Kunyiha said it is important that the government involves all relevant stakeholders in the development of policies that will have an impact on the economy.

The forum, which also brought together tax experts and public policy influencers, also reviewed the strengths and weaknesses in the Finance Act 2018 and Kenya’s proposal to the East African Community reflected in the EAC Common External Tariff of the Community to promote manufacturing.

Kunyiha said counties are an integral part of the public financial system in Kenya and important agents for creating a broad-based economy to reduce economic inequality in Kenya.

“They need support to develop their nascent public financial management systems. The debate on the state of public finance and the economy has not adequately included the role of the counties,” he added.


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