{"id":85797,"date":"2023-05-30T14:47:02","date_gmt":"2023-05-30T11:47:02","guid":{"rendered":"https:\/\/www.capitalfm.co.ke\/business\/?p=85797"},"modified":"2023-05-30T13:38:56","modified_gmt":"2023-05-30T10:38:56","slug":"proposed-levy-on-digital-content-creators-will-affect-govt-policy-on-job-creation-media-owners-association","status":"publish","type":"post","link":"https:\/\/www.capitalfm.co.ke\/business\/2023\/05\/proposed-levy-on-digital-content-creators-will-affect-govt-policy-on-job-creation-media-owners-association\/","title":{"rendered":"Proposed Levy On Digital Content Creators Will Affect Govt Policy On Job Creation \u2013 Media Owners Association"},"content":{"rendered":"<p><strong>NAIROBI, Kenya, May 29-The proposal to introduce a 15 percent withholding tax on digital content monetization has received criticism from media stakeholders who want it deleted or lowered to avoid stifling the digital growing sector.<\/strong><\/p>\n<p>According to the Media Owners Association (MOA) the government should lower the tax by 10 percent if it deems it necessary to tax digital content monetization.<\/p>\n<p>\u201cShould it be found absolutely necessary to introduce this tax, we propose specific elements of digital content monetization are excluded from the tax bracket in order to avoid administrative difficulties of collecting ta and to allow the industry to grow at a reasonable annual rate,\u201d Kalekye told National Assembly Finance Committee.<\/p>\n<p>She also expressed concerns that the proposed levy will affect the industry because it goes against government policy\u00a0on job creation.<\/p>\n<p>\u201cThere is need to give room for the industry to achieve its growth potential before introduction of taxation and create job opportunities for the youth in the process,\u201d Kalekye said.<\/p>\n<p>\u201cSince we have Gen Z content creators, there is uncertainty on how these minors will be taxed because they have no PINs,\u201d she added.<\/p>\n<p>MOE has protested the proposed introduction of a 5 percent Withholding tax on sales promotions, marketing, and advertising services.<\/p>\n<p>In submissions to the Finance and National Planning Committee, MoA through its Chairman Agnes Kalekye of Radio Africa said media cashflow will significantly reduce if their customers withhold the 5 percent as proposed in the Finance Bill.<\/p>\n<p>\u201cThe introduction of the withholding tax may lead to cash flow challenges for SMEs due to tied-up working capital. This may affect the contribution of such companies to the economy which goes against Kenya Kwanza,\u201d Kalekye told the Kimani Kuria-led committee on Monday, the last day for public participation for the Finance Bill (2023) that has elicited mixed reactions from stakeholders and Kenyans in various sectors.<\/p>\n<p>The Bill proposes to introduce a 5 per cent WHT on payments made to resident persons who carry out sales promotions, marketing and advertising services.<\/p>\n<p>\u201cOur biggest concern as the media industry is that a significant part of our income arises from such services and if all our customers withhold 5 per cent of our income, a large amount of our cashflow would be tied down in advance taxes,\u201d she said accompanied by members and officials of the association and tax consultants led by Philip Muema of Andersen.<\/p>\n<p>With the media industry on the verge of collapsing due to reduced advertisements, the Media Owners Association said its members are already faced with cashflow constraints due to the existing 2 percent Withholding tax.<\/p>\n<p>\u201cSo an additional 5 percent WHT would cripple the industry,\u201d Kalekye said.<\/p>\n<p>She cited customers such as ordinary Kenyans who place obituaries in newspapers and other classified ads who will be burdened with navigating through with the new taxes hence leading to tax leakages.<\/p>\n<p>\u201cIt costs between Sh350 and Sh2,000 to place a classified advertisement in a newspaper. Having this in mind, the imposition of the proposed tax on such low amounts seems quite exorbitant,\u201d she said.<\/p>\n<p>She implored upon the committee to consider deleting the proposal so as to enable the media industry to thrive.<\/p>\n<p>MOA is also opposed to the introduction of 15 percent excise duty on advertisements related to alcoholic beverages, betting, gaming and lotteries.<\/p>\n<p>Kalekye said there is need to have the proposal deleted, saying it will have far-reaching implications including significant loss of jobs in the industry.<\/p>\n<p>Kalekye, who was accompanied by other MoA members, told the Molo MP Kimani Kuria-led committee that the tax increase will significantly reduce expenditure on advertisement yet media outlets depend on the revenue for survival.<\/p>\n<p>\u201cOur 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,\u201d 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.<\/p>\n<p>According to the Media Owners Association, alcoholic beverages, betting, gaming, and lotteries are already subjected to excise duty and hence the move to increase it by 15 percent will only subject the products to multiple taxations.<\/p>\n<p>\u201cIf the rationale is to regulate the advertisement, it\u2019s 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,\u201d Kalekye told MPs.<\/p>\n<p>If the proposed \u00a0Finance Bill 2023 passes with the clause on increased 15 percent excise duty on advertisements on alcohol and betting activities, the media companies may be forced to increase the cost of advertising fees by 15 percent so as to meet the tax obligation.<\/p>\n<p>\u201cAdvertisements 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,\u201d she said when she made the submissions accompanied by the MoA members and Philip Muema of Andersen-the association\u2019s tax consultant.<\/p>\n<p>Finance and National Planning has commenced week-long public hearings on the Finance Bill, 2023.<\/p>\n<p>The Bill has a timeline approval of 30th June to coincide with the enactment of the Appropriation Law, 2023.<\/p>\n<p>On the emotive 3 percent Housing Fund, the association wants it deleted or made optional for staff and keep off employers because it will overburden the payroll.<\/p>\n<p>Finance and National Planning has commenced week-long public hearings on the Finance Bill, 2023.<\/p>\n<p>The Bill has a timeline approval of 30th June to coincide with the enactment of the Appropriation Law, 2023.<\/p>\n<p>On the emotive 3 percent Housing Fund, the association wants it deleted or made optional for staff and keep off employers because it will overburden the payroll.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>NAIROBI, Kenya, May 29-The proposal to introduce a 15 percent withholding tax on digital content monetization has received criticism from media stakeholders who want it deleted or lowered to avoid stifling the digital growing sector. According to the Media Owners Association (MOA) the government should lower the tax by 10 percent if it deems it [&hellip;]<\/p>\n","protected":false},"author":14288,"featured_media":85798,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[684,1,687],"tags":[11381,11383,8115,11192,11385,10587,11384,11386,8793,7351,11382,10247],"coauthors":[4322],"class_list":["post-85797","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-gornment","category-kenya","category-top-stories","tag-3-percent","tag-deleted","tag-employers","tag-housing-fund","tag-keep-off","tag-made","tag-optional","tag-overburden","tag-payroll","tag-staff","tag-the-association","tag-wants"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v25.7.1 (Yoast SEO v27.5) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Proposed Levy On Digital Content 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