UNECESSARY BURDEN

BASANGA KENNETH: Raising communication costs is unnecessary

The cost of communicating is expected to go up by another Sh0.30

In Summary

•This five per cent increase in communication costs marks the second time in its second term that the government is meddling with such costs.

•The Finance Act 2018, also increased Excise duty from 10 per cent to 15 per cent on telephone and Internet services.

Kenya holds a special place in the ‘Africa rising’ narrative concerning broadband and mobile connectivity, commensurate to the continent’s economic impact.

According to the Kenya National Bureau of Statistics, Kenya has seen its Information and Communications Technology sector grow by an average of 11 per cent annually since 2016.

This has made the sector a significant source of economic development and job creation with multiplier effects in almost every sector.

The government has been clear on its intentions to transform Kenya into a knowledge-based economy where every citizen, enterprise and organization has digital access and the capability to participate and thrive in a digitised economy, as documented by Kenya’s Digital Economy Blueprint.

Unfortunately, consolidated gains so far are at the risk of being lost owing to an unpredictable policy and regulatory regime.

The net effect is that of individuals and business entities suffering financially punitive impacts, in the guise of financial obligations – a case of the government giving with one hand and attempting to take away with the other.

The recent assent into law of the Finance Bill, 2021 has effected a five per cent increase in telephony and Internet services, from 15 per cent to 20 per cent.

The cost of communicating is expected to go up by another Sh0.30 which is an unnecessary burden on the ordinary Kenyan who is already over-burdened with many other cost increases, all as a result of the government.

This five per cent increase in communication costs marks the second time in its second term that the government is meddling with such costs.

The Finance Act 2018, also increased Excise duty from 10 per cent to 15 per cent on telephone and Internet services.

Now, telco networks have been compelled to pass these costs onto the consumer.

I take note of a telco like Telkom Kenya, which many of us subscribe to in my home area that is trying to make access to communication services much easier by the introduction of products such as the Madaraka Life to enhance access to calling and mobile internet.

Unfortunately, efforts of telcos such as these are being curbed by such tax reviews.

More costs to the customer will make day-to-day communication a luxury in an economy that is only getting tougher. The opportunity costs, of missing out, are explicit.

For a country that is viewed as reformist, and seeing massive Covid-19 accelerated digital transformation, there is a need to tame the avaricious need to milk every opportunity that offers Kenyans an opportunity to thrive. 

Serikali, please do something. 

 

Edited by Kiilu Damaris