Media houses hit with 15% ad revenue tax as state launches war on gambling
Media houses are expected to be hit with a 15% excise tax on fees charged for advertising gambling, gambling and alcohol-related activities.
These are new proposals to further reduce vices and also fund Sh3.3. the $1 trillion budget for fiscal year 2022/2023 passes through Parliament.
The “sin tax” comes at a time when media companies are grappling with declining revenues due to reduced corporate spending on media and the rise of digital platforms.
Cabinet Secretary to the Treasury, Mr. Ukur Yatani, said addiction to vices had become widespread across the country, with advertisements doing a lot to promote the habits.
“These habits are extremely addictive and can lead to various harmful repercussions, especially for young people,” he said in his budget speech to Parliament yesterday.
“To discourage the promotion of these products and activities, I propose to introduce an excise duty of 15% on the fees charged by all television channels, print media, billboards and radio stations for advertisements of these activities,” he said.
In recent years, the government has fought the gambling industry through regulations and higher taxation.
Outdoor advertising was even banned at one point, with advertising only allowed during the turnaround – the time when TV programs that might not be suitable for children can be shown.
The state, in a crackdown led by Interior CS Fred Matiang’i, said betting has become a problem in the country, especially among young people, with 54% of Kenyans involved in betting being low income.
Last year, Kenya reintroduced the betting excise duty at 7.5%. This means that the government first takes Sh7.50 for every Sh100 a player places as a bet, regardless of the winnings.
Last year, the Media Council of Kenya (MCK) “concerned by what appeared to be unregulated gambling and the promotion of related activities” formed a task force to look into betting and related activities in the media.
“The promotion and advertising of gambling on media platforms is a potential public health issue. It can have a direct and material effect on gambling participation, especially in children. Recently, we have observed media houses participating in or running unlicensed gambling programs and advertising gambling during off-peak hours, in some cases even during children’s shows. This is unacceptable,” MCK Managing Director Mr. David Omwoyo said.