Is Kenya Stifling Innovation Through Taxes?

Introduction: The Promise of Innovation

Kenya’s tech ecosystem is buzzing with energy. We’re home to thousands of young engineers with a passion for building the next big thing. Regionally, we lead in innovation - and across Africa, we’re among the top three. Many of us grew up watching shows like Silicon Valley, the startup, dreaming of launching startups that solve local problems.

But these dreams often hit a wall - not because we lack talent or ideas, but because of government policies that make innovation too expensive to pursue.

Ever asked yourself: Why hasn’t Apple, Samsung, or Coca-Cola built a factory in Kenya?

Recently, Apple expanded its manufacturing to India - adding to its bases in China and Taiwan. Why not Africa? Why not Kenya?

One reason is how other countries market themselves. Rwanda, for instance, is sponsoring Arsenal — yes, the Champions League team. They hosted the FIA awards. They’re actively making themselves attractive to global business.

Meanwhile, in Kenya, we’re overtaxing our citizens and innovators. Just recently, peaceful protests against the Finance Bill saw young Kenyans take to the streets. Sadly, some paid with their lives to oppose excessive taxation.

A Personal Example: Importing a PCB for Innovation

As someone who loves learning by building, I recently ordered a printed circuit board (PCB) from JLCPCB—a small custom board designed for experimenting with Inertial Measurement Units (IMUs). These sensors are used in everything from smartphones and VR headsets to satellites and smartwatches to detect movement, orientation, and acceleration.

An IMU is an electronic device that measures and reports a body's specific force, angular rate, and sometimes the orientation of the body, using a combination of accelerometers, gyroscopes, and sometimes magnetometers. When the magnetometer is included, IMUs are referred to as IMMUs. IMUs are typically used to manoeuvre modern vehicles, including motorcycles, missiles, aircraft, among many others, and spacecraft, including satellites and landers.

An inertial measurement unit works by detecting linear acceleration using one or more accelerometers and rotational rate using one or more gyroscopes. Some also include a magnetometer, which is commonly used as a heading reference. Typical configurations contain one accelerometer, gyro, and magnetometer per axis for each of the three principal axes: pitch, roll and yaw.

I have always been a firm believer that an IMU is a fundamental sensor that can be used to build numerous applications out of it. Have you ever asked yourself how your smartwatch or mobile phone detects if you have fallen or not? Yes, that is an IMU in place.

I was exploring how IMUs like the LSM9DS1 and BMI270 could power applications such as fall detection, motion tracking, or even fitness monitoring—things your smartwatch already does. The idea was simple: learn by building something useful.

Here’s how much it cost:

• PCB Cost: $136.43

• Shipping: $32.37

• Discount: -$10.01

• Total: $158.79

I was slapped with KES 5,758 (~$44.64) in tax. That’s nearly 30% of the PCBA cost. Then, DHL reached out with even worse news: KRA claimed the customs classification I used was “incorrect,” and they changed the HS code. That meant:

• An additional tax penalty of KES 2,931

• A 52% penalty for simply choosing the “wrong” category.

The subject shipment was verified by customs where they advise the classification use was incorrect, They have disputed the declared used HS code used 90319000 and have requested a HS code of 85423100; plus a 52% penalty for the incorrect classification.

Upon reassessment, this has resulted into extra taxes of Kes 2,931/ for incorrect classification.

This is what innovation looks like in Kenya: a simple PCB ends up costing almost double, thanks to overregulation and unclear customs processes.

Fortunately, the board did arrive without the extra charges, and I didn’t have to pay the additional penalties. But not everyone is that lucky. Many innovators find themselves paying exorbitant amounts or, worse, losing their shipments altogether.

Subira PCB front Image

The Problem: Taxes That Punish Makers

This isn’t just about me. Many young builders face the same problem. Whether it’s sensors, microcontrollers, or dev boards, the cost of importing tools for innovation is crushing.

These aren’t luxury goods. They’re tools. They’re learning materials. They’re the building blocks for startups, experiments, and open-source projects.

But with high taxes and unpredictable customs fees, many students and hobbyists give up before they even begin. It’s frustrating. It’s discouraging. And it's killing Kenya’s innovation potential at the roots.

The Missed Opportunity

We say we want to become the Silicon Savannah, but we’re doing the opposite of what Silicon Valley did. We’re punishing experimentation. We’re taxing curiosity. We’re making it harder to build.

What if Kenya had a policy to waive import taxes for small-scale, educational, or prototyping hardware? What if we supported local makers the same way India supports theirs?

That small IMU board could’ve become the core of a health tracker, a VR app, or a robotics project. Instead, it became a lesson in bureaucracy.

Innovation doesn’t require millions in funding—it needs fewer obstacles.

Let’s start by:

• Eliminating or reducing taxes on small-scale electronic components for R&D.

• Creating clearer, maker-friendly customs guidelines.

• Recognizing that tools for learning and prototyping are investments in Kenya’s future—not luxuries.

If we want to grow world-class engineers, researchers, and founders, we must stop stifling them at the port.