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Africa: govts urged to review taxation to lower connectivity costs

Africa , 20 Oct 2015

Africa: govts urged to review taxation to lower connectivity costs

African governments have been urged to lower connectivity costs to ensure its citizens realise economic opportunities.

This was one of the key discussion points raised at Transform Africa 2015 being hosted alongside the FTTH Council Conference underway in held in Kigali, Rwanda.

Experts have suggested a reduction in tax on IT products and processes.

"Taxation in Africa is an issue, as an entrepreneur who is employing people," said Peter Ngunyi, President of BRCK, the power supply initiative centred around a portable, self-powered and cloud-enabled WiFi hotspot router.

Ngunyi said that the product is being manufactured in the US and not in Kenya due to local cost issues including taxation. He added that they would want to have it manufactured locally, but the cost relation is not conducive.

According to Ngunyi local technology players can reach a compromise with government on taxation issues that will spur growth.

Kojo Boakye, the Deputy Director for Affordable Internet for All, said that discussions on taxation boosts the uptake of mobile devices in Kenya.

"We know in Kenya, the government took away the taxation on devices that showed a huge jump in the market by about 200 percent and coincided with the increase of mobile phone penetration," Boakye said.

Up for auction

Spectrum auctions was also presented as a way for governments across Africa to reduce cost of internet access. Spectrum auction is a process in which stakeholders bid for available frequencies with the added objective of establishing a fair price for all.

"Auctioning of the digital dividend is good in that it can benefit the rural and urban regions," said Mortimer Hope, Director: Spectrum and Public Policy Africa at the GSM Association.

"The governments will gain because when the services are provided there will be more options of corporate taxes," he added.

Hope added that authorities should avoid introducing a high starting price at auctions because that would discourage the sector players.

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