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Boost for musicians as Skiza tune removed from excise duty list

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

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Summary

  • The State has exempted ringtones from excise tax in a bid to increase the amounts that local artistes earn from the use of their songs in mobile phone.
  • The removal of the tax on the ringtones is contained in changes to the Excise Duty Act that took effect on July 1, through enactment of the Finance Act, 2021. It is also aimed at lowering the cost of ringtones.

The State has exempted ringtones from excise tax in a bid to increase the amounts that local artistes earn from the use of their songs in mobile phone.

The removal of the tax on the ringtones is contained in changes to the Excise Duty Act that took effect on July 1, through enactment of the Finance Act, 2021. It is also aimed at lowering the cost of ringtones.

The changes seek to increase the amounts that Safaricom, Airtel and Telkom Kenya pay artists for the use of the songs as ringtones and reduce the amounts that callers pay for use of the tunes.

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

“The following excisable goods shall be exempt from excise duty when purchased… excisable services supplied in Kenya by a mobile telecommunication service provider on the sale of a ring back tune to a subscriber,” reads the Finance Act, 2021.

Removal of Skiza tunes from the list of excisable products comes at a time local artists have protested meagre earnings of as low as Sh20 in royalties from the use of their songs as ringtones.

The paltry royalties earned in 2018 prompted local musicians to hit out at State agencies tasked with collection of the fees.

The State has in recent times stepped up efforts to protect the earnings of local artists for the use of their songs.

Kenya last year introduced a centralised system for collection of the royalties that targets to net up to Sh2 billion annually, from the current Sh200 million.

President Uhuru Kenyatta said businesses that use artists’ songs will be required to show proof of royalty payment to have their licences renewed.