EAC govts in talks to establish smart device assembling plants

The cost of smartphones, which is blamed on the tax regime, has made it impossible for many Ugandans to enjoy the benefits of such devices. Photo / File 

What you need to know:

  • The talks, government says, seek to lower the cost of smart devices across the region 

Government has said it is in talks with East African Community member states on the possibility of establishing smart devices assembling plants in the region. 

The move, ICT Minister Chris Baryomunsi said in Kampala on Tuesday, is one of the channels through which EAC governments are seeking to have negotiated arrangements with phone manufacturers with the view of cutting the cost of smart devices. 

However, it was not immediately clear what level the  talks are, when they will be concluded and what exactly they will be seeking to achieve. 

“We are seeing how we can have assembling plants in the region. As a country, we are examining the tax policy. Our desire is to see the lowest person able to transact using a smartphone,” he said. 

Smartphones, which have enhanced features, remain out of reach for many Ugandans. An average smartphone goes for Shs150,000, a cost that is largely out of the way for many Ugandans.  

Early this year, telecoms raised concerns on the high tax regime, which translates into high device costs. 

Uganda Communications Communication records indicate there are 12 million smartphone users in Uganda.    

However, telecoms say the figure is low for the country to realise the smartphone potential arguing that it has been largely affected by high taxes such as value added tax, import duty, withholding tax and infrastructure levy, among others.  In its annual report MTN noted it was engaging government on the possibility of reducing taxes charged on smartphone devices to increase affordability and access.  

Uganda Revenue Authority records show taxes levied on smartphones are dependent on the type and the country of origin of the device. 

Import duty attracts a 10 percent levy, VAT (18 percent), withholding tax (6 percent) and infrastructural levy (1.5 percent), which comes to a total of 35.5 percent. During the same meeting, National Information Technology Authority- Uganda (NITA-U) also announced a further reduction in the cost of internet for government agencies from Shs254,000 to Shs127,049 per megabytes per second.

Mr Baryomunsi said government has over the years reduced the cost of internet for its agencies and departments from as much as $1,200 (Shs4.3m) in 2012 to $35 (Shs127,049). 

Mr Hatwib Mugasa, the NITA-U executive director, said the move will catalyze adoption of e-government services, noting that this will also drive innovations among government agencies, ministries and departments. 

The national backbone infrastructure spans 4,300 kilometres extending connectivity to around 1,466 government, 53 districts and 9 border points.