I recently read an article by Kwame Owino a Daily Nation newspaper writer who published an article stating subsidies for wealthy movie studios won't help Kenyan film and as much as he laid out quite a few good pointers. I really don't think he was able to look at the full spectrum of how it could benefit Kenya's film industry before pronouncing it a dead end. So I will take a chance in demonstrating how I could possibly package the nitty gritty from the perspective of a Film Producer and a Minister/Cabinet Secretary. So hear it goes...
What is a Tax Incentive?
A tax incentive is an aspect of a country's tax code designed to incentivise, or encourage a particular economic activity.
they are analysing factors in the number of jobs that will be lost in other areas of the state’s budget due to cuts. Of course, these cuts have negative ripple effects throughout the economy just as the newly created jobs have a positive impact. By contrast, the Filmmakers only looks at the positive effects of the new jobs that are created.
Despite the considerable differences, everyone agrees that the tax incentives have a positive impact on the economy. However, that’s not really saying much, since almost any form of government spending is likely to have a positive impact on the economy.
Is it necessary for Kenya?
What I would implement - As Minister of Sports and Culture
I would start my declaring I AM ANTI CORRUPTION!! (That's a wink wink for you Mr. President on your next cabinet reshuffle). Moving forward. I really think looking at this incentive as a way of attracting foreign films to Kenya is not the right window to be looking through. I think looking at it as a way of providing jobs, training and growth to the Kenya's Film Industry should be the only window to package our incentives.
How I would tackle it is by providing a range of rebate options ranging from 33% to 10% for foreign film companies. At 33% you would need to satisfy conditions such as 90% of the Production needs to happen in Kenya, a strict number of above the line and below the line employees have to be Kenyan, notably you will need a Kenyan co-producer, with a minimum number of crew to be used, while at 10% rebate you will need to meet an amount of local expenditure threshold, a number of necessary below the line intakes and you would need to sell the tax credit to a Kenyan company to receive the cash.
I would however provide a 20% tax rebate for any fully Kenyan owned production that spent 1 million and above shillings within Kenya from pre production to post production. Tax credits to individuals or companies that invest 5 million shillings and above into a film or TV show that is produced and released in Kenya.
Why I need Tax incentives - As a Kenyan Producer
What do you think of my tax incentives plan? Do you have ideas of your own? We welcome you to share them in the comments section.