Categories: Business Plans

Uganda slaps 10% Tax on imported Smartphones, as it begins Local Production

Uganda has been on a drive to secure its local economy from foreign corporations who have been reaping big returns. It first started with the Ugandan government levying taxes on social media use. Now as the country is gearing up for mass productions of its first smartphone, the government has imposed new taxes on the importation of all phones.

Related: Kampala continue to see escalating protests against the Social Media Tax as Police accused of meting more brutality on protesters

Yes, Uganda is set to join the leagues of countries manufacturing smartphones. The government is hellbent on giving the phones made in Uganda a price competitive edge over those imported. Hence the introduction of the 10% tax on all imported phones. It goes without saying that the price of all other phones (not made in Uganda) will go up in price.

Uganda’s SIMI brand of Smartphones

The phones are produced under the SIMI brand. The brand mainly targets the average customer, with one of the key qualities of their phones being an extended battery life.

The brand says its feature phones can run for up to two weeks on a single charge. The SIMI feature phones are also adapted for solar power recharge. For the SIMI smartphones, the battery life is said to last at least two days on a single charge.

Uganda to export Smartphone to Morocco

There are reports that the SIMI smartphone production facility in Uganda has the capacity to churn out 2,000 phones per day. Already, the company has already flagged off 18,000 phone consignment to be exported to Morocco anytime soon.

SIMI is also said to be working with local universities to have students develop apps and software for the handsets.

According to a publication by Gadgets Africa, Evelyn Anita, the Minister of Investment and Privatization in Uganda said the government will start giving incentives and priorities to businesses producing products and components needed by the government. The said products and components referred to seem to fall under the computer and smartphone category.

The Minister further hinted to a possibility of the 10% tax of imported smartphones being raised to 25%.

It is now 10% but will shoot to 25%. This is because we want to create demand for these [Ugandan-made] phones. We have been donating jobs and money to other nationals. As Ugandans, we must embrace our products,” said Anita.

Related: Uganda moves to block VPNs that enabling Ugandans dodge the social media tax effective July 1st

Ugandans should brace themselves for even more expensive phones

Already, most Ugandans feel the cost of smartphones in the country is quite high. With the introduction of these new tax regime on imported smartphones, more people will feel the pinch of acquiring a new non-SIMI brand phone.

Traditional phone brands like Samsung, iPhone, Huawei, Tecno, OPPO, and other international brands will be much further away in terms of affordability for the average Ugandan. Hopefully, as the Ugandan government, by design, prices out the international brand smartphone, the SIMI brand will fill the huge shoes left by the big brands like iPhone and Samsung.

The government should really hope that whatever alternative SIMI will be presenting to the market will not leave much to be desired. Hence, SIMI must ensure its hardware and software are at least, at par, with the international brands whose supply in the Ugandan market is not being throttled.

Museveni reaffirms Uganda’s commitment to taxing social media as the platform has just been for lying and giving money to foreign companies
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Felix Omondi

Kenyan citizen with a passion for writing for as long as I can remember. In my spare time, I like to blog and read up on trends that's happening around the world.

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