Over the past couple of years, one of the most problematic provisions in the Copyright Act has been, without doubt, section 36, which reads, in part:
(1) A manufacturer or producer of sound and audio-visual works or recordings shall apply
to the Board. for the authentication of copyright works.
(2) The Board shall authenticate copyright works according to all required documents
furnished to it by the applicant for that purpose and shall issue an approval certificate in the prescribed form to the applicant for authority to purchase an authentication device from the Kenya
(3) A manufacturer or producer of sound recordings or audio-visual works shall purchase
such authentication device from the Kenya Revenue Authority as may be required to cover the
number of copyright works he intends to sell or distribute.”
10 years since the drafting and enactment of the Copyright Act, section 36 has not been implemented as envisaged with the Kenya Copyright Board (KeCoBo) handling the issuance of the authentication stickers without any involvement from Kenya Revenue Authority (KRA). KeCoBo launched the authentication stickers in 2010 and called it “Anti-Piracy Security Device (APSD)”. This APSD is composed of both a hologram and barcode stickers, sold together by KeCoBo. Earlier this year, IPKenya discussed the APSD here.
KeCoBo has in the past argued that there are two angles to having a voluntary registration system accompanied with authentication of copyright works through the APSD: 1) revenue collection; 2) deterrent against piracy. However the reality is that KeCoBo lacks the resources and infrastructure to ensure that the APSD is available for purchase throughout the country. In addition, the non-involvement of KRA as provided for in the Act has resulted in a number of court cases filed against KeCoBo for acting ultra vires and in breach of the statutory provisions.
The rationale behind section 36 was based on Ghana’s Copyright Office which chose the national internal revenue service to be in charge of issuing authentication stickers to be affixed on all copyright works being sold. The internal revenue service KRA would therefore be best placed to issue these stickers because it was considered that KRA has the necessary infrastructure already in place including offices countrywide as well as measures for security, storage and distribution.
Another compelling factor behind KRA’s consent to be part of the copyright administration process was that it would allow it to levy tax on the audio-visual and musical copyright industries. This sector largely operates in the informal sector of the economy, which is largely untaxed. The added advantage of KRA is also that its Customs Department works at the national borders and can enforce authentication of all imported copyright works coming into the country.
In light of this, KeCoBo will be forced in the very near future to approach KRA and come up with either a Memorandum of Understanding (MoA) or an Agent-Principal Agreement so as to give full effect to section 36. Regardless of what name or shape this agreement takes, it is clear that KRA will solely be responsible for issuing the APSD in all its branches countrywide, collecting the proceeds from the sales of the APSD and accounting for the same to KeCoBo. However, it is almost certain that KRA will levy tax from the proceeds of the APSD sales since those monies are not considered as ‘exchequer revenue’ and also for purposes of covering its costs involved in collection.
KeCoBo on its part would remain the enforcement authority and therefore would have to expand its enforcement actions countrywide to ensure that the APSD is being purchased and affixed on each copyright work being sold, in line with the Act.
It is worth mentioning that KeCoBo has, at several times this year, undertaken to use a portion of the proceeds from the sale of the APSD to set up an “Artists’ Fund” which would be used to conduct awareness campaigns and provide some financial assistance to copyright holders in Kenya. Therefore a meaningful partnership with KRA would ensure that KeCoBo is able to collect enough money to set up this fund as well as run its other operations as mandated by the Act.