Players in the information industry are urging the government to scrap taxes on Information and Communications Technology (ICT) items saying its curtailing growth of the sector.
Techno Brain Managing Director Manoj Shanker says the 16 percent value added tax on imported ICT equipment has made Kenya an expensive business destination.
In response, Deputy President William Ruto said the government is looking at offering tax holidays to spur growth in the ICT sector speaking during the unveiling of Microsoft research and testing centre.
In 2013, the government imposed a 16 percent value added tax on mobile phones, laptops and other ICT equipment in a move that was widely criticized by industry players.
Though overall the sector grew by 11 percent in 2017, the number of ISP players dropped from 242 to 219 with a majority of them moving to Rwanda and Tanzania due to better tax incentives.
The 2018 economic survey shows that the value of investment by the telecommunication players dropped by 26 percent to 38 billion shillings in 2017.
Deputy President Ruto said the government is looking at challenges facing the ICT sector and will soon unveil a package of tax incentives to give the country a competitive edge.
The testing center which is the first in Africa and the fourth in the world is expected to create 1,000 jobs in the next three years and training thousands of people on cutting edge technology like applications and programs development.
Deputy President Ruto said the government has accelerated the roll-out of the national fiber optic backbone infrastructure that will avail high speed and low cost broadband to all the 47 counties once completed.