To Actualize The Digital Tax, The Government Must Change The Procurement & Disposal Act To Recognize Influencers And Bloggers First

By Steve Biko Wafula / Published February 4, 2021 | 4:01 pm

KEY POINTS

In Kenya, it’s estimated that 57% of newspaper revenue comes from government advertising.

National governments remain the single largest source of revenue for news organizations in Africa. In Rwanda, for example, a staggering 85-90% of advertising revenue comes from the public sector.

However, news organizations have morphed into something new, thanks to social media and digital platforms. With platforms like Twitter, Facebook, LinkedIn, Blogs, the news is being shared differently and this has created a serious legislative aspect when it comes to how to control, verify and help grow or nurture the new realm of news sharing.

Now, the news is available at the push of a button. Anyone now can become a news source as long as they have a social media platform.

Social media has changed how we think, how we communicate, and how we relate to brands, to politicians, and to our governments. In Kenya, it’s estimated that 57% of newspaper revenue comes from government advertising.

In 2013, the government spent Ksh40 million in two weeks just to publish congratulatory messages for the new President Uhuru Kenyatta. Not to mention almost KES 1B they spent on social media engagements across the diverse platforms by paying Facebook, Google, and Twitter directly and a myriad of influencers.

The current administration changed how the public engages with the government by pushing the use of social media.

In a memo, reportedly sent to all government accounting officers a while back, the directive was given that state departments and agencies would only advertise in My.Gov – a government newspaper and online portal. Electronic advertising would only be aired on the state broadcaster – the Kenya Broadcasting Corporation.

This in essence opened a Pandora’s Box because it was a way in which the government was marshaling and controlling the media by denying them the huge advertisement cake.

The Public Procurement and Disposal Act, Chapter 412C is very clear on how the government should do its procurement. It defines how any government agency must tender for its advertisement.

The law states that any government announcement must run in the top media outlets so that the public can be aware and this is good because at least the majority of the media outlets end up getting some advertisement revenue.

The law unfortunately has not kept up with the changing times, especially on how to regulate revenue that the government will tender for social media platforms.

This year, KRA has been on a media blitz with conferences and trends on why the #TheDigitalTax is important and why we should pay for it. I have no issues with KRA and what they doing. They are simply doing everything they can to ensure that they raise the needed capital from able tax payers for the growth of our country. However, on this one, I believe they are putting the cart before the horse. Here is why.

READ: The New Digital Services Tax Is A Retrogressive Policy

If the Government of Kenya wants to tax and control how the digital and internet space is being used by entrepreneurs to make a living, then they need to amend The Public Procurement and Disposal Act, CAP 412C so that the following can be included in the category of those who can make a living by advertising for the government too. We must all share in the national cake whenever the government wants to tender for an advertisement.

Influencers like @SokoAnalyst @RobertAlai etc
Bloggers like @SokoDirectory @Kahawatungu @Kenyanwalstreet @Techweez
Facebook pages with over 20000 likes
LinkedIn pages with over 50000 likes

If we in the digital space are to pay for any tax that comes from our sourcing and delivering for any digital work, then it’s only fair that we are categorized in the same breath with the traditional media outlets and be legible for tenders on any government advertisement. We cannot be taxed to the end of the world yet we are not recognized in law as far as the Procurement and Disposal law is concerned.

I would like to urge KRA to take a moment, pause, push for the Act to be changed to include the aforementioned issues then come back to use and train us on this tax so that we can be able to understand and ensure that we do our national duty of paying taxes.

All over the world, governments are the biggest spenders on advertisement and in Kenya, in particular, the devolution aspect creates a bigger opportunity for advertisers to make more money from the two-tier government structure.

It is important to change the laws and ensure that fairness is achieved. We cannot be forced to pay taxes like those in the traditional media YET we have no access to government tenders as influencers and bloggers. Fairness must prevail.

Everyday social media is changing how we do things and it’s critical to adapt to the changes because that’s the only way we are going to grow and ensure that we do not kill the numerous opportunities in the digital world.

So before KRA can push for the implementation of #TheDigitalTax, my prayer and the humble request is that push and lobby for the change in the Procurement and Disposal Act to recognize Influencers and bloggers to put us on the same par with the traditional media players and to ensure that we have access to the same opportunities like them.

READ: Digital Services Tax Is A Threat To Kenya’s Digital Footprint

About Steve Biko Wafula

Steve Biko is the CEO OF Soko Directory and the founder of Hidalgo Group of Companies. Steve is currently developing his career in law, finance, entrepreneurship and digital consultancy; and has been implementing consultancy assignments for client organizations comprising of trainings besides capacity building in entrepreneurial matters.He can be reached on: +254 20 510 1124 or Email: info@sokodirectory.com

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