The proposal to introduce a 15 percent withholding tax on digital content monetization has been criticized by media stakeholders who want it deleted or lowered in order to not stifle the digital growing sector.
The government should lower the tax by 10 percent if it deems it necessary to tax digital content.
In order to avoid administrative difficulties of collecting ta and to allow the industry to grow at a reasonable annual rate, we suggest that certain elements of digital content monetization be excluded from the tax brackets.
The industry will be affected by the proposed levy because it goes against government policy.
It is necessary to give room for the industry to achieve its growth potential before taxation is introduced.
She said that since Gen Z content creators have no PINs, there is uncertainty about how they will be taxed.
The MOE objected to the introduction of a 5 percent Withholding tax on sales promotions.
The MoA said in submissions to the Finance and National Planning Committee that if customers don't pay 5 percent, the media will have a hard time making money.
The introduction of the withholding tax could cause cash flow challenges for small and medium-sized businesses. The final day for public participation for the Finance Bill (2023) has elicited mixed reactions from stakeholders and the public.
Advertisement. Scroll to continue reading.5 per cent WHT is proposed to be added to payments made to resident persons who carry out sales promotions.
A large amount of our cashflow would be tied down in advance taxes if all our customers didn't pay 5 per cent of their income in taxes.
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.
The industry would be crippled by an additional 5 percent.
She said that customers who place obituaries in newspapers and other classified ads will be affected by the new taxes and will lead to tax leaks.
The cost to place a classified ad in a newspaper is between Sh350 and Sh2,000. She said that the proposed tax on low amounts seemed excessive.
She asked that the proposal be deleted so that the media industry could thrive.
The introduction of 15 percent excise duty on advertisements related to alcoholic beverages is opposed by the MOA.
There needs to be a deletion of the proposal because it will have far-reaching implications, including the loss of jobs.
Advertisement. Scroll to continue reading.The tax increase will reduce expenditure on advertisement yet media outlets depend on revenue for survival according to the MoA member.
She said that the companies are expected to significantly reduce their expenditure on advertisements, actions that will negatively impact on our revenues and lead to cost-cutting measures.
Alcoholic beverages, betting, gaming, and lotteries are already subject to excise duty and therefore the move to increase it by 15 percent will only subject the products to multiple taxations.
advertisement of such products are already regulated with regards to the size of the advertisement and the time at which the advertisements are broadcasted.
The media companies may have to increase the cost of advertising by 15 percent in order to meet the tax obligation if the finance bill passes with a clause on increased excise duty on alcohol and betting.
As far as the billboard and other printed material sizes are concerned, and also in relation to airing times, advertisements related to alcohol and betting are already regulated. She said that the introduction of excise duty with a view to regulating advertisement was not an effective regulatory tool.
Public hearings on the Finance Bill began this week.
The Appropriation Law will be enacted on June 30th of this year.
The association wants the 3 percent Housing Fund to be optional for staff and not compulsory for employers.
Advertisement. Scroll to continue reading.Public hearings on the Finance Bill began this week.
The Appropriation Law will be enacted on June 30th of this year.
The association wants the 3 percent Housing Fund to be optional for staff and not compulsory for employers.
