Drop VAT On Computers In Uganda

LAST week I buttoned up my Chairman of the ICT Association of Uganda shirt and went before the Parliamentary Committee on Finance, Planning and Economic Development to tell them what I thought the ICT private sector thought about certain taxes.

Joining the Business Process Outsourcing Secretary General Rogers Karebi and a couple of private businessmen, I was happy to listen to other groups lay their issues on the table and observed the Committee members’ reactions and interjections enough to change our strategy of approach.

Rather than have them read our prepared text, therefore, we opted for an impassioned and well-reasoned discussion that they would identify with in their real lives.

The thrust of our argument was aimed at returning Uganda to the days when there was no Value Added Tax (VAT) levied on computers, and computer software, and the relevant accessories.

A lot of debate could have ensued around the need for taxation to raise expenditure for the government to spend on social services such as health, education and security, but it was limited because we made our position clear.

Computers, we explained, are not end products in themselves but should be considered as factors of production. By raising national revenues from levying taxes on computers (please take the term to cover software, hardware and accessories), the government is, in essence, increasing its cost of production and therefore compromising the quality of its products as well as making those products that much more expensive.

Computers, we told the legislators, are an inevitable basis of development because they are used as part of the processes in all the other sectors – agriculture, health, education, security, and so on and so forth.

Research, for instance, is enriched greatly by the use of computers because it is easier to collate information, compare data, surmise positions and findings, publish and archive them. If computers are availed cheaply within the country and allowed to be distributed so countrywide, there will be a lot more research done by many more people into the problems we have or solutions we need.

Education, which benefits from research in no small manner, also benefits greatly from the availability of cheap or affordable computers. Considering that Uganda is doing well as the education centre of the region, if we only had many more computers for our schoolchildren we would probably start taking in pupils and students from South, Central and North Africa as well!

Student numbers aside, though, the quality of our own pupils would be greatly improved if they were exposed to the power of personal computers from an early age and allowed to integrate them into their learning experiences.

On their own, computers can even be as useful as flower vases, but as one Parliamentarian objected to our proposals he argued that the government needed to raise money for projects such as the national internet backbone.

Exactly, we quickly responded, we are all FOR the backbone being built and spread nationwide but it will be pretty useless if computers are not made affordable!

Picking up a sheet of paper nearby, I quickly drew them an image depicting the connectivity and optimal use of internet bandwidth provided by having an internal (national) network as provided by the Uganda Internet Exchange Point, and the additional possibilities if we had computers penetrate more than just 10% of Uganda.

I don’t have the actual figure even now, but computer use penetration in Uganda is still ridiculously low if you don’t count mobile phones as computers. And that led to another point, but not one we picked up on fast enough because we can do without the controversy for now.

The definition of computers is soon going to boggle the minds of the authorities because of the capabilities of mobile phones today. People like me, for instance, can do all the work we produce off iMacs and MacBook Pros, right off our Samsung Galaxy unit of choice. Sadly, the mobile phone is taxed just as much as computers are, so there was no benefit in bringing it into our story that day.

Instead, we moved on to computers in agriculture. Again, starting with research the use of these machines to that sector would make amazing differences! Think of how much improved farming we could do if we managed farms and agricultural projects by computer, and also the improved sales and marketing worldwide from getting farmers onto the internet.

The Parliamentarians nodded in approval, and we went on to health, where we didn’t even need to talk about research again. All the treatment we have been reading about in the newspapers, though, is mostly done on computerised equipment in South Africa and India. The reason we go there is not because the doctors there are magicians, but it’s because they have machinery that makes the diagnosis and treatment more accurate, easier and more certain to work.

And all the above is as a result of innovation which is best spurred by the inquisitiveness of a certain category of people at an early age. and best put into practice if they have good computers at their quick disposal.

Considering that we are inland, computers in Kenya are certainly much cheaper than they are in Uganda, so their competitiveness in all of the above is definitely more favourable. Where other countries might introduce taxes on such categories, therefore, a country like Uganda should change tax policies to develop our base faster and then tax the increased production.

Take taxes off computers, people, and let’s create wealth and development faster!