When it comes to the amount of money collected from importers of blank media and recording devices, it is not clear how much has been collected.
When it comes to the amount of money collected from importers of blank media and recording devices, some say it is Sh100 million, while others claim that the real figure is six times higher.
Not even the High Court, which has twice blocked distribution of the money, knows exactly how much the Kenya Trade Network Agency has collected from importers of blank media and recording devices.
In March, Ms Ummi Bashir, the PS for Culture, Arts, and Heritage, told the National Assembly Committee on Sports and Culture that Kecobo had collected Sh103.7 million since September 2023.
Lazarus Muli, the chairman of Music Copyright Society of Kenya (MCSK) said the figure is somewhere north of Sh600 million.
“We can’t prove it because we aren't the ones doing the collections. But from what our sources tell us, the amount isn’t anywhere near Sh100 million, it’s about Sh600 million,” he told Nation. Africa.
Music Copyright Society of Kenya Chairman Lazarus Muli.
The Kenya Association of Music Producers (KAMP) CEO, Mr Maurice Okoth, echoes the sentiments.
Sharing of revenue from one of the least-known taxes in Kenya – the blank tape levy – has triggered a fight, which has blocked the distribution of millions to artists, who are the beneficiaries.
The levy is a small fee charged on manufacturers and importers of blank media and recording devices.
If it can hold or copy creative content, then you owe Caesar his pound of flesh for manufacturing or importing the device – a small tax on the digital lives of millions living and working in Kenya.
When one imports audio cassettes and CDs, for instance, they are charged Sh5 towards the blank tape levy.
For video games consoles, memory cards and portable hard drives, Sh200 is charged for each unit, towards the levy.
Computers, mobile phones and smart watches, the government charges Sh1.5 percent of their purchase price, before deduction of other taxes like import duty. This means that a phone imported at Sh30,000 before payment of tax, then Sh450 will be charged towards the blank tape levy.
The collection is done through three bodies – KenTrade, the Kenya Revenue Authority (KRA) and Kecobo.
Collection of the levy officially started on September 22, 2023 – four years after amendments to the Copyright Act introduced the levy. In 2022, further amendments tasked KenTrade and Kecobo with collection powers, in collaboration with the KRA.
KenTrade is tasked with invoicing importers and manufacturers after confirming the number of devices being released to the market.
The KRA is KenTrade’s collection agent, which then transfers the money to Kecobo.
While Kecobo in 2020 promised to keep its administrative costs at below five percent of the money collected, the law caps its cut at 20 percent of the collections.
Competing interests and the swelling sheer size of the pot by day have forced the court to intervene, effectively freezing any distribution.
On September 13, 2023 gospel artist Reuben Kigame and creatives Celestine Mbogo and Stanley Ahoya obtained a court order barring distribution of the collections.
The trio sued KenTrade, KRA and the Attorney-General, forcing Kecobo to delay collection by a week.
When it comes to the amount of money collected from importers of blank media and recording devices, it is not clear how much has been collected.
But Kigame, Mbogo and Ahoya failed to prosecute their case by pushing for a hearing date, and the court responded by terminating the suit. The trio has now filed an application to reinstate the case.
The MCSK, the country’s oldest and largest collective management organisation with a membership of over 16,000 artists, filed its own petition in September 2023 and also obtained an order barring distribution of the funds collected.
The MCSK, which represents artists, argued that the process lacked transparency and fairness.
The case remains active, with its next hearing slated for 2026, while the purse carrying blank tape levy collections grows heavier by the day.
For MCSK, the point of discontent is Section 30Bof the amended Copyright Act, a clause it claims still echoes with tones of discrimination. The music body argues that while sweeping reforms promised progress, this provision has preserved a glaring discrimination, effectively shutting its members, the musicians, out of millions in private copying remuneration.
“Section 30B perpetuates discrimination to the extent that it excludes compensation to copyright owners of musical works. Over the years, we’ve been assured that this anomaly would be corrected, yet Section 30B still directs that PCR funds be shared only between performers and producers of sound recordings, completely excluding the authors, composers, and publishers who create the works in the first place,” argues MCSK.
The society insists that, as thelargest collective of copyright holders in the country, it deserves 60 percent of the total revenue collected under the blank tape levy scheme.
Currently, the Act mandates that PCR compensation be collected and distributed through CMOs representing performers and producers. But MCSK contends that this framework unfairly sidelines other vital contributors to the creative ecosystem, the very minds behind the music.
“The remuneration under Section 30B does not provide for compensation to copyright owners the authors, composers, arrangers, and publishers of musical, artistic, and literary works, nor to broadcasters or other related rights owners,” MCSK laments.
On the other side, Kecobo has defended its proposed distribution model, arguing that it mirrors successful practices in countries like Malawi, Nigeria, and Ghana. Under its framework, the regulator would retain 20 percent, allocate 8 percent as agent commission for the contracted agents Webtribe T/A Jambo Pay, and 2 percent to KenTrade for managing the collection system, and distribute the remaining 70 percent to the creative sector.
“The 70 percent share of blank tape royalties allocated to the creative sectors shall be distributed to the rights holders in music and sound recording, whose share percentage will be 37 percent. The audio-visual right holder, which includes film producers, actors, scriptwriters, gamers, and animators, will get 15 percent. While literary works right holders (book authors and publishers, and visual arts) will receive 18 percent,” says George Nyakweba, the acting executive director at Kecobo.
The regulator wants the suit dismissed, holding that there is no express or implied exclusion of the persons the MCSK seeks to be included in the sharing of the revenue, as Section 30 and 2 mentions related rights and ‘owner of the copyright’, which implies all right holders of intellectual property works are catered for.
“The orders sought against herein are in vain, as the law expressly recognises different portions of copyright.”
For KAMP, the CMO representing music producers, the presence of the agent on retainer flaunted by Kecobo to collect the funds and in return receive 10 percent of the millions, is what is causing the institution of 4,000 members sleepless nights.
The Kenya Association of Music Producers (KAMP) chief executive Maurice Okoth.
KAMP CEO, Mr Okoth, has protested Jambo Pay’s presence in the blank tape levy collection process.
“In the public notice on how they propose to share the money, in there they have sneaked in an eight percent agency fee of the millions of shillings expected to come in annually. Why does Kecobo feel the need to want to pay an agency eight percent, which translates to millions of shillings for doing nothing? We know why, and we intend to challenge it. We cannot have agents in this process. It's such a sensitive matter,” Okoth said.
In 2023, KAMP terminated its contract with Jambo Pay, declaring them redundant in their operations and communicated the same to Kecobo to align its books with the regulator.
KAMP accused Kecobo of insisting on onboarding Jambo Pay despite advice from KenTrade that the agent is no longer of importance.
“Kecobo’s insistence to have these agents leaves us perturbed as to the motive, as the regulators should instead ensure that maximum amounts possible are remitted to the right holders. The regulator proposal is that the agent receives an even larger share than some right holders, who should be the major beneficiaries. An agent serving as a payment gateway that is no longer required is proposed to receive more revenue than the actual right holders.”
