During last year’s budget finance minister Njeru Githae announced that some equipment had been zero rated to allow growth in the ICT sector as he allocated the KSh7.2 billion to the industry.
Among key highlights during the last budget speech was the zero rating of set-top boxes needed for the planned digital migration so as to make them economical to Kenyans.
The waiver of the 25 per cent duty on set-top boxes has led to the drop of the cost of equipment with StarTimes saying it has subscribed more than 170,000 clients on its platform over the past year, representing about 70 percent of the market.
“Mr Speaker, as the Hon. Members might be aware the entire world is targeting year 2015 as the deadline to migrate from analogue television to digital television signals. To make the set-top boxes which form an integral part of this migration available to Kenyans at an affordable price, I propose to remove duty on the importation of these gadgets,” he said.
One year down the line many will argue that the lack of proper consumer education has been the biggest hindrance to the migration.
It is likely that the government might leave this policy unchanged so as to encourage more people to buy the gadgets with the planned phase one switch off set to occur on September 15.
Another key highlight was the zero rating of all tax on imported software even as the country seeks to encourage computer literacy.
He noted that a stronger ICT sector would help increase economic growth with cheaper software likely to attract more foreign investment into the country.
“Mr. Speaker, the telecommunication and ICT subsectors have continued to play a critical role in the entire economy. In order to continue supporting this critical subsectors and further spur economic growth, I propose to remove all duty on all imported software to make it cheaper to our people and further attract foreign investment in this industry,” he added.
It is not clear as to whether the government will retain this policy, however the recent visit by the Microsoft global president Jean Philippe Courtois to hold talks with President Uhuru Kenyatta is likely to see a retention of the policy.
Other benefits the sector could see is increased allocation for internet connectivity with the government having announced its intention to see all schools, hospitals and police stations connected to the fibre backbone will towns are targeted for Wi-Fi connection.