For many years, Kenyan musicians have been a crying lot in regards to the revenue generated from digital platforms. But in a twist that may turn around their fortunes, the National Assembly has exempted them from tax, writes Manuel Ntoyai

Industry players in the creative space are proposing a raft of amendments in the Copyright Act that would ensure artistes get a proper share out of their royalties.

This comes after years of tug of war between the musicians, Content Service Provider (CSPs) and Collective Management Organisations (CMOs). For a long time, a majority of Kenyan artistes have displayed their utter disgust with how their royalties are paid out to them.

Running into hundreds of millions of shillings, the royalties money collected and distributed by the CMOs and CSPs barely makes any economic sense in the artistes’ pockets. 

Recently, however, the National Assembly moved to exempt artistes from the 25 per cent Excise Duty proposed in the Finance Bill.

 Telecom firm Safaricom, for instance, charges Sh1 per day to subscribe to a ringback tune on Skiza Tunes.

Out of the sum, it retains 51 cents as operation fees, while the taxman takes 25 cents.

The rest, 24 cents, is shared between the artiste and the Premium Rate Service Provider (PRSPs) as agreed between them.

PRSPs are regulated by the Communication Authority of Kenya (CA), and for an organisation to provide premium rate service in Kenya, they are required to obtain a Content Service Provider (CSP) licence from CA, or alternatively provide those services through a licenced CSP service provider based on an authorisation from the authority.

Removing bottlenecks

“The removal of the tax is a good start because people in the right places have started to realise that this is an avenue for employment.

The arts industry employs a lot of people and for a long time, the government has been turning a blind eye to our plight.

You cannot have a company that takes more than a half of every Sh1 paid for a song daily, then have the PRSPs taking a chunk out of the same.

If we continue with the same model, then our artistes will continue to suffer more,” says popular music producer Dr Eddie.

Earlier last year, President Uhuru Kenyatta directed the ministry of ICT to work with stakeholders to ensure all legal bottlenecks that hinder artistes from enjoying the toil of their labour have been eliminated. After that, the National Rights Registry (NRR) was birthed.

It is a portal that acts as the central repository, which collates details pertaining to ownership of various copyrights under the Kenya Copyrights Board (Kecobo).

According to Kecobo’s CEO Edward Sigei, while the NRR mandate falls under Kecobo, right holders need to educate themselves on the relevant taxes and how it impacts them.

“When it comes to this particular issue, the relevant tax is the one on airtime, as airtime is the currency of Skiza. It is now taxed at a rate that impacts badly on the money owed to the artiste,” he told Spice.

By 2018, Safaricom was paying Sh220 million every month to artistes, with the money being channelled through various content service providers that the artistes are registered with, with a market base of more than 11 million users.

“The Skiza share ratio is a serious conversation that Safaricom should have with the artistes.

Artistes invest in the creation of the content, production and marketing; it’s therefore very prudent for Safaricom to reduce its share and maybe the government can also waive the tax from the artistes,” says Performers Rights Society of Kenya (Prisk) chairman Ephantus Wahome, who leads the CMO with a membership of over 5,000 people. He insists that it’s time that the Copyright Act was reviewed to better suit the artistes.

“It’s time to look at this issue holistically. There are several clauses that were passed, but we feel they were not subjected to public participation.

This has given the regulator more powers that if not checked, can be maliciously used to frustrate the process of independent bodies such as the CMOs,” he states.

According to him, although the Copyright Act of 2001 (2019 version) gives a good detail on the rights of a performer, reinstatement of section 30 (A) will see ratification of the Beijing Treaty, which emphasises on the reinstatement of equitable remuneration of a performers. This would by itself strengthen negotiations on matters audio-visual.

“Again, considering the provisions of Section 49 of the Act, the cabinet secretary under whom copyright matters fall on their docket should at all times consult with CMOs before imposing any regulation or policy change.

A consideration can also be done on Section 45 on the qualification of CMO directors.

This would enhance transparency and accountability. The act should have the clause on enforcement of copyright infringement,” opines Wahome.

Recently, the National Assembly Finance Committee chairperson Gladys Wanga moved a motion to amend the Copyright Act, which would see artistes get more revenue from ringback tunes such as the Skiza Tunes. 

“Artistes in this country sweat blood to be able to record and play their music… The rewards are poor compared to the investment these young artistes make,” said Wanga, who is also the Homa Bay Woman Rep.

Skiza battles

Until 2017, Safaricom used to pay the Skiza tune royalties to CMOs (Music Copyright Society of Kenya (MCSK), Kenya Association of Music Producers (Kamp) and Prisk, who then paid the artistes.

But a court ruling directed that the giant telco to pay the Skiza royalties directly to CSPs who in turn would pay the artistes. Safaricom started the Skiza platform in 2009.

In March this year, veteran gospel singer Reuben Kigame, who on Wednesday declared his ambitions to vie for presidency in the 2022 General Elections, opened up on the frustrations he alleged had been subjected to by CMOs and other bodies that use his music.

In a series of tweets, the Enda Nasi hitmaker blamed the likes of MCSK and Safaricom for paying him peanuts in form of royalties.

“Before I am told to be grateful, think about MCSK and Prisk hoarding royalties from 2009, Safaricom, and other bodies getting the bigger share in collections, piracy, and cartel theft!

If anyone doubted God can provide, ask me. I am one of those doing very well, or so I assume.

What are other musicians getting? Out of Sh10 of Skiza royalties, I keep Sh2 or 3.

The rest is somebody else’s! (sic)”, an angry Kigame wrote on one of the tweets, further alleging that he received royalties of only Sh10,545 in February 2021 after a loan deduction of Sh6,986.

And with the royalties war still raging on, one of the battlefronts that needs to be addressed when it comes to matters copyright is the working formula between artistes, song engineers, producers and their production labels.

It is a conflict that is supposed to be addressed by a split sheet, but continues remain elusive.

“Split sheets are important because they make sure everybody gets appreciated for their efforts; the producers get paid, artistes get paid and everyone else involved.

However, the structures in our music sector are not very well streamlined because they are almost non-existent unless the artiste is signed to a label or when they do collaborations amongst themselves,” says Dr Eddie.

At the same time, more industry stakeholders are making their stand on the need for inclusivity, with private sector players asking a seat at the high table.

According to Transsnet Music Limited-East Africa (music streaming service Boomplay’s mother company) managing director Martha Huro, the Copyright Act should recognise private companies as players in the administration of copyrights in Kenya.

“This is based on the fact that artistes have been dealing with PRSPs on a contractual basis but the Act only recognises the CMOs as established under Section 3 of the Act where it establishes the Kecobo to regulate them.

It is also evident that the same artistes have lost faith in the recognised CMOs due to their lack of accountability and are currently calling for major improvements on them or to be done away with completely.

It is also public knowledge that the number of suits between PRSPs and CMOs are now out of hand and an amicable solution on how the two should co-exist in the industry should be reached and legislated upon as soon as possible,” she intimates.

Holistic amendment

Entertainment lawyer Moriasi Omambia says there needs to be overhaul amendments to the Act, so that it conforms to the current digital needs and any other need in the future.

“We need to make stronger amendments around infringements. For example, when dealing with digital piracy, we need to expand the definitions behind it.

We also need a more empowered and accountable regulator (Kecobo), especially when it comes to managing the CMOs, some of which have gone rogue,” he says.

Moriasi, who is also Sauti Sol’s lawyer, adds that there is a need for tax laws to be changed, and urges legislators to dive into the issue to not only pay artistes better, but also enriching the national coffers. 

He says in conclusion, “This falls into the hands of our parliamentarians who at the moment have been a let down, especially those who started their careers from the arts industry.

If that does not happen, then industry leaders could lobby the Kenya Revenue Authority, Finance ministry and National Assembly to act on the desired changes.

The last option would be through a constitutional petition in court, which should be the last resort as it is time consuming and expensive.”