TAXES HINDERING GROWTH OF THE FILM INDUSTRY IN KENYA
Stakeholders across the board in Kenya’s film industry agree on one thing, Money. From the producer trying to make things fit in place in their production to the actors and crew of the same production complaining of being under-paid. Whilst there could be other factors that can be attributed to lack of funds for a healthier film industry, the major contributor can no doubt be the high TAXES filmmakers in Kenya have to pay to make films and distribute them.
If our audiences wonder why Kenyan films are not rampant in the market on DVD, below is the answer courtesy of Alexander Konstantaras, Jitu Films Director and Independent Film maker and distributor.
Here is a tax break down of what it costs to shoot a one and a half hour movie and produce 50,000 DVD’s for sale as the law stands today in Kenya.
- 10 Shooting days
- 30 editing days
- 50,000 DVD’s.
- Ten retail shops/stalls in Nairobi.
A. Film License
Before any commence of shooting you need to acquire a film license from the Department of Film Services (DFS)
10 days shoot costs 5,000 + 10,000 = 15,000
SECTION A TOTAL 15,000
B. Film Censorship
After the film is shot and edited we are required to have the film censored by the Kenya Film Censorship Board. The KFCB charges Kes 100 per minute to censor a film.
90mins x 100 = 9,000
SECTION B TOTAL 9,000
C. Import Duty
We do not have a DVD replicating plant in Kenya. Jitu Films has identified a supplier who is able to do the mass replication, DVD printing and Jacket printing all for Kes 30 per copy. Hence we get the replication done abroad and ship the DVD’s to Kenya. At the port of entry the DVD’s are subject to the following taxes.
Invoice Value is 50,000 DVD’s x 30 = Kes 1,500,000
KRA Excise Duty @ 25% = 1,500,000 x 25% Total 375,000-
KRA 16% VAT = (1,500,000 + 375,000) x 16% Total 300,000
KRA GOK Fee’s 15,000
KRA IDF Fee’s 5,000
KEBS Fee’s 15,000
CLEARING AGENTS Fee’s 5% of the Subtotal above 710,000 x 5% Total 35,000
SECTION C TOTAL 745,000
D. Kenya Film Censorship Board
Once the 50,000 copies have been cleared from the port of entry into the country the Kenya Film Censorship Board requires each copy of the DVD to have a sticker from the Board. Each of these stickers cost Kes 10,
50,000 DVD’s X 50 = 500,000
SECTION D TOTAL 500,000
Please note that this cost is higher than even the DVD production, printing and replication by the supplier abroad !!
E. Local Government /City Council
With the stickers in place you will need to open shops to sell the DVD’s or use the existing retail outlets. Each retail outlet is required to have a special permit to sell DVD’s from the local authorities. For Nairobi the council requires 5,000 for an annual license for a Stall and 15,000 for a DVD shop or supermarket. If you were to open 10 shops around the city to distribute the DVD’s you require to pay the city council
5,000 x 10 shops = 50,000.
Section A 15,000
Section B 9,000
Section C 745,000
Section D 500,000
Section E 50,000
GRAND TOTAL 1,319,000 .
As the current law stands you need to give the various departments of Government the figure above IN ADVANCE to be able to sell 50,000 DVD’s locally. Its Kes 70 per DVD in advance taxes only.
AND THIS DOESN'T INCLUDE THE COST OF THE ACTUAL FILM PRODUCTION!!!
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