Business
Private sector calls for tax scrap on new computers
Publish Date: Aug 15, 2014
Private sector calls for tax scrap on new computers
The ICT fraternity sees removing VAT on imported new computers as a way of discouraging importation of used computers
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By David Mugabe & Jacquiline Emodek

The ICT fraternity is calling for the removal of VAT on imported new computers and computer software as a way of discouraging the importation of used computers.

“Most of the people are hesitant to cough the 18%, I see people going back to the second hand,” said a private ICT entrepreneur from PC World company.

The recommendation on the removal of the 18% VAT imposed on these equipment are part of a finding done to assess the impact of the declaration to ban used computers imports by government in 2009/10.

The other recommendation is that government should uphold the ban while NITA-U, the technology authority and standards body should expedite computer standards to distinguishing new from old, refurbished and cloned.

James Saaka, the NITA chief the efforts in streamlining ICT activities are to propel Uganda into a knowledge based economy.

Presenting a report yesterday on the impact of the ban on importation of used computers, Joseph Oriokot, a researcher with AH Consulting said there were concerns from the public that the ban on used computers would stifle increased computer penetration.

But there also other concerns even if the ban was well intentioned to safeguard health, environment and development, it did not have clear specifications and laws to deter smuggling.

“Much as there is an increase in importation of new computers, many have opted to buying spare parts and assembling them from here,” noted Oriokot.

Government imposed a ban on importation of used computers in 2009/10 with a view of combating the accumulation of electronic waste.  However this sparked resistance and outcry that the ban would stifle business and economic activities.

In November 2011, cabinet decided that the ban be reviewed and the National Information Technology Authority (NITA-U) commissioned the research which was done among 163 institutions, 8 importers and 638 computers all done in about 15 districts.

The findings show that the total value of computer spares parts imported before the ban was sh88.7billion, but after the ban, the total value was sh143.1billion meaning spares are being brought in to assemble used computers.

Also from 2006-09, the quantity of computer imports shot up sharply to about 500,000. After the ban, numbers started falling to about 150,000.

There are currently 2.5 computers for every 100 Ugandans by 2012 rising from just 0.3 in 2003, an indicator of the growth of ICT in the country which ranks it among the top ten in Africa.

Also despite the ban on importation of used computers, there has been an escalation on e-waste yet there are no clear mechanisms on managing e-wastage.

“There are computers wasting away in organizations and government offices and yet children in rural areas do not have access to a computer but computer studies are on the syllabus,” Opio James Oyo, a teacher from from Gombe secondary school.

Opio adds that Government should consider green computing and recycle the computers it has disposed off.

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