Five things Kenyan creatives want removed from Finance Bill 2024

In a joint memorandum dated June 6, players in the sector say that specific proposals enshrined in the Bill pose grave ramifications in the creative industry and provide a hostile market for creatives.

Arguing that they contribute 5% to the national GDP the government is only reneging on its promise to bolster the growth of the creative industry.

They therefore seek to amend the First Schedule of Cap 472- Part II Excisable and increase excise duty on airtime and data included in the Bill.

The clause, they argue, will cripple the digital economy's growth and will directly impact creative business. 

"For example, all musicians on SKIZA will now receive less revenue because Skiza is traded in airtime and the payments are made net of applicable taxes. We recommend that VAT and Excise on airtime internet and data be waived as this Is not a value-added product."

The second clause they want to be scrapped is the proposal to charge eco levy on video cameras, SD cards, CDs, microphones and other sound recording equipment included in Section 45.

"This will further increase the cost of doing business in this sector by increasing the cost of inputs," they say. 

They also want the Ksh.24,000 monthly relief from withholding tax proposal highlighted in Clause 25 (D) to be deleted, proposing to have the relief limited to be raised to Ksh.49,999.

"This will directly impact the growth of smaller and younger creators working in our sector by making it harder for them to reinvest in their craft," they added.

Likewise, the sector wants the 1.5% Digital Service Tax in Clause 8 to be replaced with a Significant Economic Presence (SEP) Tax at 20% of Gross Turnover.

"We anticipate that global platforms working in Kenya will now reduce their investment in Kenyan-made content and this will cause job losses. We recommend that there be a fiat tax rate of 6% charged on profits and that the VAT currently charged on payments to these platforms be removed."

Lastly, they want to amend the First Schedule to Cap 470, clause 6 and remove exemptions for amateur sports organizations. 

"We would like to remind the National Assembly that amateur sports represents over 90% of Sports in Kenya and provide the foundations of the creation and development of a sports-based economy," they note.

In their view, the existing exemptions should be expanded in line with the goals of the Talanta Hela initiative under the Ministry of Sports.

The Finance Bill 2024 has been met with stiff contention from Kenyans in different quotas including Multinationals, Digital Taxi operators, opposition leader Raila Odinga, and telecommunication giant Safaricom who argued that the Bill will have adverse effects on investments and government programmes.