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Media Owners Association Reject Tax on Betting, Alcohol and Advertising

During yesterday’s Public Participation session, which was presided over by the National Assembly Finance and Planning Committee, The Media Owners Association of Kenya was one of 18 Entities that rejected the establishment of a 15 percent excise levy on ads, alcoholic beverages, betting, and lotteries in the Finance Bill 2023. media owners tax

The association, led by Chairperson Agnes Kalekye, said in its presentation to the Finance and National Planning Committee on Monday regarding the proposed Finance Bill, (2023), that the proposal needs to be dropped because it will have far-reaching effects, including a sizable loss of jobs in the industry.

The Molo MP Kimani Kuria-led committee heard from Kalekye, who was joined by other MoA members, who claimed that although the tax rise would dramatically lower the amount spent on advertising, media outlets still needed the money to survive.

Our expectation is that these companies will significantly reduce their expenditure on advertisements, action that will negatively impact on our revenues and lead to cost-cutting measures including laying off personnel.

she said citing the current tough economic times facing media stations, most of which have already laid off a significant number of staff due to reduced revenue.

The Media Owners Association claims that Alcoholic beverages, betting, gaming, and lotteries are already subject to excise duty, therefore the effort to increase it by 15% will just subject the products to additional taxes,

If the rationale is to regulate the advertisement, it’s important to note that advertisement of such products are already regulated with regards to the size of the advertisement and the timings at which the advertisements are aired.

Kalekye told MPs.

The media businesses would be required to raise advertising rates by 15% in order to cover the tax obligation if the proposed Finance Bill 2023 passes with the provision for a 15% excise duty rise on advertisements for gambling and alcohol. media owners tax

Advertisements relating to alcohol and betting/gaming are already regulated as far as the billboard and other printed material sizes are concerned, and also in relation to airing times. Introduction of excise duty with a view to regulating advertisement would, therefore not be an effective regulatory tool.

she said when she made the submissions accompanied by the MoA members and Philip Muema of Andersen-the association’s tax consultant.

Numerous Petitions Filed Against the Bill.

Hundreds of public petitions opposing the Kenyan Government’s proposed taxes in the Finance Bill 2023 have flooded parliament, putting additional pressure on members of the ruling coalition who have been urged to pass the divisive legislation.

At least 1,000 memoranda on the Finance Bill 2023 were sent to the National Assembly; 970 of those memos, according to sources, were against the bill. This will probably make the government’s mission of getting the Bill passed in the House difficult.

Samuel Njoroge, the clerk of the National Assembly, estimated that there were 893 memoranda received by Parliament, including 137 substantive contributions made before the relevant committee by various organizations together with 756 that were sent as emails and comments.

A lot of petitioners have also opposed ideas like the obligation to deposit security equal to 20% of the disputed tax amounts before filing an appeal against a taxation decision. Additionally, many people have disapproved of proposed agency taxes as VAT withholding and quick VAT remittance to the Kenya Revenue Authority (KRA). Since Monday, the Committee on Finance and National Planning has held meetings with various stakeholders to engage the public and hear their concerns about the Bill.

Owen Baya, the deputy majority leader in the National Assembly, minimized yesterday’s stakeholder objections, claiming that mainly corporations were opposed to the increased levies.

Actually, most corporates will oppose the Bill because they do not want to pay taxes and will incite the public.

Mr Baya said.

Memoranda seen by showed that the majority of Bill’s measures were opposed by the memos’ authors. The majority of Kenyans will be burdened by the new taxes system, according to the Anglican Church of Kenya, represented by Archbishop Jackson Ole Sapit. Prior to the plans being submitted to Parliament, it has demanded an extensive public review.

Read Also: Multichoice To Launch Betting and Payments Platform in South Africa

However, Mr. Njoroge omitted from listing down who supported or opposed the Bill. The proposals to raise the value-added tax (VAT) on petroleum from eight to sixteen percent, impose a proposed housing levy equal to three percent of an employee’s base pay, and raise the income tax rate to thirty-five percent for those making more than Sh500,000 attracted the most petitions.

The three-day timeline presents a compliance risk as it is extraordinarily short.

The accountants say.

The Bill is also opposed by the Marketing Society of Kenya, which labels the inclusion of a 15 percent withholding tax on the development of digital material as discriminatory.

The withholding tax rate of 15 percent on digital content creation is discriminatory and punitive as other professional fees are charged at five percent.

The society says in its memorandum.

The group claims that the Bill does not set a ceiling on the amount of digital content providers’ revenue that is subject to taxation.

The Kenya Tobacco Control Alliance has also voiced worry over the Finance Bill’s failure to raise the excise duty on tobacco and nicotine products for the first time. The omission is described as disturbing.
Through its CEO Dedan Ondieki, newly rebranded Ports Sacco asserts that balancing is necessary to ensure that the majority voice is adequately represented in the Bill. media owners tax

Supporters of the current regime have also been seen to distance themselves from the controversial bill by advising the government to withdraw it and find alternative means to address the key issues raised by Kenyans.

My unsolicited advise to Kenya Kwanza, President: Pull back. Listen to Kenyans. Withdraw the Finance Bill 2023. Postpone the implementation of the Housing Levy. Return to the Drawing Board. Hire new, independent and TRUTHFUL ADVISORS. Reshuffle your communications team and hire two or three FRESH FACES. Don’t rely on YES MEN and YES WOMEN. Don’t be defensive. Don’t argue with the PEOPLE.

said Dr. Miguna Miguna on Twitter.

The Finance and National Planning Committee has commenced week-long public hearings on the Finance Bill, 2023. The bill’s approval date is set for June 30, 2023, to coincide with the passage of the Appropriation Law 2023. 

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Jeremiah Maangi

A trusted igaming leader & author for articles bringing positive change in the African gambling industry. African gambling domains broker. Intelligent knowledge of customer acquisition and retention strategies. Available for new & existing gambling operations consulting and marketing services in Africa. Crypto enthusiast.

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