The Media Owners Association (MOA) has opposed the introduction of 15 percent excise duty on advertisements related to alcoholic beverages, betting, gaming and lotteries.
Through its chairperson Agnes Kalekye, the media owners said they stand to lose Sh2 billion if MPs pass the Finance Bill 2023.
She noted that the tax increase will significantly reduce expenditure on advertisement yet media outlets depend on such revenue to survive.
“Our expectation is that these companies will significantly reduce their expenditure on advertisements, the action will negatively impact on our revenues and lead to cost-cutting measures including laying off personnel,” Kalekye said on Monday.
She was speaking while making submissions before the Finance and National Planning Committee on the proposed Finance Bill 2023.
MOA chairperson was accompanied by the association members Philip Muema of Andersen—he association’s tax consultant among others
Going further, Kalekye noted that if the proposed Bill passes with the clause on increased 15 per cent excise duty on advertisements on alcohol and betting activities, the media companies may be forced to increase the cost of advertising fees by 15 per cent to meet the tax obligation.
“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.
The association also opposed the introduction of a 15 per cent withholding tax on digital content monetisation.
In the submissions, MOA said the digital economy is an integral part of Kenya’s Vision 2023 hence the need to make laws that do not stifle its growth.
“Should it be found absolutely necessary to introduce this tax, we propose specific elements of digital content monetisation are excluded from the tax bracket in order to avoid administrative difficulties of collecting tax and to allow the industry to grow at a reasonable annual rate,” Kalekye said.
