Ringtones have been exempted from excise duty by the state in an effort to boost the amount of money earned by local musicians from the usage of their tunes on mobile phones.
Changes to the Excise Duty Act that went into effect on July 1 with the adoption of the Finance Act, 2021, included the elimination of the ringtone tax. It also aims to reduce the price of ringtones.
The reforms aim to boost the sums paid to artists by Safaricom, Airtel, and Telkom Kenya for the usage of their music as ringtones while lowering the fees paid by callers.
Safaricom customers may earn up to Sh1.50 for each local Skiza track they use as a ringtone.
The Finance Act, 2021 states that “the following excisable commodities will be free from excise tax when acquired… excisable services delivered in Kenya by a mobile telecommunication service provider on the sale of a ring back tune to a subscriber.”
The removal of Skiza tracks from the list of excisable items comes at a time when local musicians have been protesting meager payments of as little as Sh20 from the usage of their songs as ringtones.
The low royalties obtained in 2018 led local musicians to lash out at state organizations in charge of collecting the money.
The state has recently increased its attempts to preserve local artists’ revenues from the usage of their music.
Kenya implemented a centralized system for collecting royalties last year, with the goal of raising the current Sh200 million to Sh2 billion.
President Uhuru Kenyatta has stated that firms that use the music of other artists would be forced to provide proof of royalty payment in order for their licenses to be renewed.