The Media Owners Association (MOA) of Kenya has asked the government to remove its proposed increase to gambling advertising taxes included in the Finance Bill 2023.
Speaking before the Finance and National Planning Committee on March 29, Agnes Kalekye, the chairperson of the MOA, slammed the bill’s inclusion of a 15 percent excise duty fee for advertising on television, in print media, on billboards and radio stations, which would apply to alcoholic beverages and all forms of gambling.
Kalekye, who is also The Star Newspaper’s chief operating officer, warned that the excise duty on advertising will have far-reaching effects, including significant loss of jobs in the media industry, as she predicted that media outlets will struggle to sell much of their advertising space if the new tax is introduced.
“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.
Currently, there is no excise duty on gambling adverts; however, they are subject to other taxes and rules.
In an open letter published in The Star Newspaper on March 30, the MOA further outlined its opposition to the advertising tax.
“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 wrote in the paper.
The Finance and National Planning Committee is currently holding a week-long hearing on a host of tax changes proposed by the government.
The MOA was one of 18 organisations that has already participated in these meetings and expressed opposition to the bill in some form or another. Many more are expected to join that list this week.
The MOA’s comments come soon after the Media Council of Kenya (MCK), an independent national institution that sets and enforces media standards, published an open letter on May 23 expressing its concern over “the continued increase in advertisement and promotion of gaming activities on media platforms”.
The MCK advised journalists and media enterprises to ensure that only adverts by licensed operators are accepted for publication.
Among the raft of proposed excise duty changes proposed by President William Ruto to fill a large budget deficit is an increase to the excise duty on betting, gaming and prize competitions from 7.5 percent to 20 percent.
It also proposes to increase the lottery excise duty from 7.5 percent to 20 percent.
Increasing the amount of taxes raised by the government has been key in ongoing negotiations between the country and the International Monetary Fund (IMF), which just last week agreed to loan cash-strapped Kenya €927m.
Speaking during a development tour on March 21, President Ruto said the tax increases included in the bill, which has also come under fire prior to the hearings from opposition legislators and some business owners, will improve the lives of Kenyans and touted a housing programme that he said will “provide at least one million jobs”.
A decision on the bill has become a matter of public interest in Kenya and is due before June 30, 2023.
Beyond changes to taxation, the country’s gambling industry is currently undergoing something of an overhaul.
The government has plans to update its gambling laws and increase revenue collection from the sector.
Alongside the bills, the taskforce has also published a draft gambling policy for Kenya in 2023.
Additionally, over the past few months, the Kenya Revenue Authority has been working to ensure that licensees are connected to its new real-time monitoring system, which has already helped increase tax collection in the industry.