By Patricia Mollyne Mataga
There has been an ongoing debate over some of the tax proposals that the government is seeking to introduce under the 2024 Finance Bill.
Several stakeholders from the manufacturing, business community and insurers among others have come out to express their opposition to proposals they feel will negatively impact them – if implemented.
There have also been concerns on the effect of the tax proposals to the common mwananchi.
The creative industry is also set to experience a negative impact due to some of the proposed tax measures that directly touch on them.
A section of the players in the industry last week presented a memorandum to the National Assembly, detailing proposals in the bill which they feel might hurt them.
We take a look at some of the areas the content creators highlighted in the memorandum shared on X by former Citizen TV and TV47 presenter Willis Raburu.
Proposed increase in excise duty on airtime and data
The Treasury has proposed an amendment that will see an increase in excise duty on airtime and data that will see the cost of the two services rise for the common mwananchi.
But for the content creators, this proposal will mean a shrink in incomes for revenues from SKIZA tunes.
The content creators are usually paid based on net of applicable taxes.
Eco levy on broadcast equipment
In the 2024 Finance Bill, there is a proposal to introduce a new levy on sound equipment for TV and radio broadcasting which means their cost will automatically go up.
Most content creators need cameras, and other TV and radio equipment for their smooth operation – and with more levies on them, they will have to dig deeper into their pockets.
Digital Service tax
This tax was first introduced in the 2023 Finance Act. However, the government is seeking an amendment to the law to replace the earlier 1.5 per cent digital tax with a 20 per cent gross turnover tax.
“This proposal will complicate the business and will also portray Kenya as a hostile market globally,” said the content creators.
“In addition, we anticipate that global platforms working in Kenya will now reduce their investment in Kenyan-made content and this will cause job losses,” they added.
Exemptions of amateur organizations
The Treasury has proposed that amateur sports organizations be removed from those exempted from paying tax.
However, content creators argue that the existing exemption should be expanded in line with the goals of the Talanta Hela initiative by the Ministry of Sports.
“We would like to remind the National Assembly that amateur sports represent over 90 per cent of Sports in Kenya and provide the foundations of the creation and development of a sports-based economy,” they said in the memorandum dated June 6, 2024.
“Further, while we welcome the additional recognition and broader definition of the digital marketplace in the bill, we recommend that the digital market be declared a Special Economic Zone in order to offer this sector the necessary public investment and incentive for it to grow and be able to compete globally,” they added.