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Kenya: Unpredictable business climate gives investors concern

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Uncertainty over the next government strategy to raise revenues and the recently introduced taxes are the biggest source of migraines for investors and manufacturers.

Lack of a predictable tax regime has left many guessing on counter-measures needed to cushion their operations against government-induced tax pains.



The situation has been worsened by State agencies’ delay in inspecting imported raw materials, culminating in hefty demurrage charges that have also seen the government impose a 20 per cent tax.

Kenya Association of Manufacturers (KAM) acting chief executive Tobias Olando says the government has stifled the competitiveness of Kenyan goods abroad by introducing a raft of taxes along the entire chain forcing manufacturers to pass on the costs to consumers.

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Speaker after speaker at a Nairobi forum convened by KAM last week, lamented ongoing policy shifts that introduced new taxes on cash transfers, withdrawals as well as other financial transactions that attract a fee, saying this amounted to choking Kenyans’ access to money for personal and corporate development activities.

 In 2017, Kenya’s economy reported over 24.1 million bank-to-bank transfers and over 215.6 million card payments worth Sh3.95 trillion and Sh1.4 trillion respectively.

Kenya Bankers Association Director Nuru Mugambi said Kenya was killing technological innovations in mobile payments by introducing new taxes based on transactions. The financial tax has been increased from 10 per cent to 20 percent.

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The latest Markit Stanbic Bank Kenya Purchasing Managers’ Index (PMI) reported that last month local manufacturers experienced slower output levels and order growth, an indication that higher prices occasioned by a raft of tax changes were hurting the economy.

The PMI reading for September stood at 52.7, compared to 54.6 in August. PMI readings above 50 signal an improvement in business conditions on the previous month, while readings below 50 show a deterioration.

Institute of Economic Affairs’ John Mutua said Kenya needs to improve on its project implementation rate that currently stands at a 71 per cent absorption rate.

KAM’s vice-chairman Mucai Kunyiha called for review of the current tax mechanism and reversion to the traditional arrangement where individual companies had a customs warehouse for finished goods.

Audit and tax consultancy firm EY’s Associate Director John Gikima, however, welcomed taxes on airtime and data bundles, saying this had finally brought in more people onto the loop that were initially excluded.

Mr Gikima said the current strategy would deeply hurt the poor who rely on kerosene for their fuel and lighting needs. He said taxing money transfer services was a bad idea since it would hurt the successful financial inclusion achievements.

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Samsung to resurface Gear VR device with Galaxy S10

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Samsung spokesperson has expressed that they are ready to resurface a new lineup of Galaxy S10 phones with an improved Gear VR headset. adding that the Gear VR device will contain adapter that will  allow Samsung phones to access the device.



The designed Gear VR can accept several different phone sizes thanks to its spring-loaded catches, it still requires some conscious design effort by Samsung to limit the size and shapes of its phones to fit, and preload a certain amount of software so a Galaxy phone detects that it’s been plugged in.

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However, he admits that the features were improved due to the challenges the users observed on Samsung Note 9, where the user had to contact Samsung to get the adapter and the music of Elton John.

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Meanwhile Samsung  states it hasn’t given up on the brand. Which, to be fair, is also what its partner Oculus disclosed last September, pointing out that $19.9 Oculus Go doesn’t totally compete with the Gear VR, since apps that developers make for either one are 100-percent compatible with the other.

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President Ramaphosa to Sign South African Competition Amendment Bill Into Law

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South African President Cyril Ramaphosa will sign into law today the Competition Amendment Bill, which will strengthen regulations against anti-competitive behaviour in industrial markets.



The bill, which was approved by the National Assembly in October 2018 and endorsed by the National Council of Provinces in December 2018, is a step in the right direction for SMEs, economic inclusion and it opens up the economy to fresh investment and innovation.

It also provides a clear mandate to the competition authorities to address economic concentration in a balanced manner and to promote economic transformation, the Presidency said on Monday.

Additionally, the amended legislation seeks to combat concentration and economic exclusion as core challenges that contribute to slower and less dynamic growth, lower employment and greater inequalities, as well as socio-political conflict.

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The Presidency said this will enable a more effective approach to concentration, with a focus on improving outcomes for small and black-owned business, and strengthen the institutions involved in managing competition policy and law.

The signing ceremony will take place this afternoon at the Tuynhuys Chambers in Parliament. Economic Development Minister Ebrahim Patel, who campaigned fiercely for the bill’s codification, will join the ceremony along with a group of stakeholders.

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