By James Anyanzwa
Computer assembler, Mecer East Africa Ltd, has faulted the Government for applying double standards in its tax policy.
The South African firm on Thursday claimed it paid a 10 per cent and 25 per cent import duty on key components it uses to assemble its computers. This, it says, is despite computer components being zero-rated.
The controversial tax payments include a 10 per cent and 25 per cent duty charged on computer ‘Motherboards’ and processor cooling fans respectively.
"We have to pay millions of shillings in duty and nobody is doing anything. We have been complaining for the last three years," Riana Keyser, the firm’s Managing Director told The Standard.
Keyser said the additional costs, which have to be passed on to the consumers, have typically jeopardized the firm’s competitiveness in the market as opposed to the zero rate enjoyed imported computers.
"Definitely our prices have to go up and we can’t compete," said she said.
The firm’s market share that stood at about 12 per cent last year has so far shrunk by three per to nine per cent this year. This the company attributes to competition from other players, notably HP and Toshiba.
In 2006, the Government declared that all computer parts to be zero rated in order to promote the development of telecommunication in the country.
When presenting the current Budget, the then Finance minister Amos Kimunya removed import duties on all printers that are specifically used together with computers.
Keyser, however, said her firm has since lost a total of Sh1.5 million over the last three years in payment of ‘outlawed’ taxes. Mecer East Africa Ltd is a Kenyan subsidiary of Mustek Pty, a publicly listed company on the JSE and Taipei stock exchanges.
