The State is considering penalizing multinational firms with local operations over their move to shoot commercials in other markets that are aired in Kenya.
This was remarked by the ICT Cabinet Secretary, Joe Mucheru on Friday last week.
“Adverts are being done outside the country and they are brought in to Kenya in flash disks and these companies do not pay taxes,” he said in the event. “We have had discussions and we now need to start implementing airing tax for these adverts.”
He also challenged the Communications Authority of Kenya to evaluate modalities through which the regulator can impose penalties to reduce foreign production of commercials and incentivise the creation of adverts locally. “The firms who are producing the adverts locally, they are hiring people and paying taxes yet are being penalised when people take all that money to other countries,” the ICT CS was quoted as saying.
On the other side, the Kenya Film Commission had proposed tax credits since they say the industry has been starved off investments and the former would spur its development.
Multinationals usually take advantage of their huge economies of scale where they create a single advert that is aired across different countries. In Kenya, charges on commercials are done at the national and county level and this has resulted in little interest.
Now this new initiative by the CS could mean that we could see a situation where we see less foreign shot commercials, unless they come up with a way to make Kenya a great place to shoot them.
