Excise Tax Law

Increase for musicians as Skiza melody has been faraway from the excise checklist

July 5, 2021
Jason Wilson

Companies

Boost for musicians as Skiza melody has been removed from the excise list

Monday, July 5th, 2021

Safaricom’s headquarters on Waiyaki Way in Nairobi. PHOTO | DIANA NGILA

john-mutua-img BY JOHN MUTUA
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Summary

  • The state has exempted ringtones from excise duty to increase the amounts local artists make using their songs on cell phones.
  • The abolition of the tax on the ringtones is included in the amendments to the Excise Tax Act, which came into effect on July 1 when the Finance Act 2021 came into force. They are also designed to reduce the cost of ringtones.

The state has exempted ringtones from excise duty to increase the amounts local artists make using their songs on cell phones.

The abolition of the tax on the ringtones is included in the amendments to the Excise Tax Act, which came into effect on July 1 when the Finance Act 2021 came into force. They are also designed to reduce the cost of ringtones.

The changes aim to increase the amounts Safaricom, Airtel and Telkom Kenya artists pay to use the songs as ringtones and reduce the amounts callers pay to use the melodies.

Callers on the Safaricom network pay up to Sh1.50 for each local Skiza tune they upload as a ringtone.

“The following excise goods are exempt from excise duty when purchased … excise services provided by a wireless operator in Kenya when a callback number is sold to a subscriber,” states the 2021 Finance Act.

The removal of Skiza songs from the excise list comes at a time when local artists have been protesting meager revenues of just Sh20 in royalties from using their songs as ringtones.

The pathetic royalties earned in 2018 prompted local musicians to check in with government agencies charged with collecting the fees.

The state has recently stepped up efforts to protect local artists’ income from using their songs.

Kenya implemented a centralized royalty collection system last year aiming to net up to Sh2 billion annually from the current Sh200 million net.

President Uhuru Kenyatta said companies using artist songs must provide proof of payment of royalties in order to have their licenses renewed.