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New Lagos tax policy will stifle entertainment industry – Stakeholders

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Timing Is Very Insensitive, Says Sound Sultan
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As controversy over the recently announced tax on songs and videos by the Lagos State Film and Video Censors Board (LSFVCB) continue rages, more stakeholders have expressed displeasure over the move, saying the new policy would stifle the industry, which government have in no way supported since inception.

Some stakeholders, who are unaware of the new tax policy, expressed shock over the new policy. Jagbajantis crooner, Olanrewaju Fasasi, better known in the music industry as Sound Sultan, said: “Haba! Kilode? It is a funny thing; I don’t understand why we like shooting ourselves while we are down.”

He said the entertainment industry, particularly music, has in the recent past been undergoing a lot of downturn following the outbreak of the Coronavirus (COVID-19) pandemic, adding that no matter how lofty the idea is: “It is not the right time for the government to come up with and enforce such policy. It doesn’t reflect what is going on in the world right now.

“If it is a plan or way for them to regulate the industry from being an all-comers affair and make it look more serious, it is fine. It is a fact that the entertainment industry is uncontrolled right now, as there is no proper structure for its governance; hence it has become an all-comers industry, unlike other industries or sector that have structures and are properly guided and guarded.”

The musician noted that if the industry had had one voice, stakeholders would not be running helter-skater, saying the Performing Musicians Employers Association (PMAN), the umbrella body of artistes in the country, has denied being part of it.

“Looking at the timing, I feel it is very insensitive to come up with such law, as the industry is not working right now. Most people in the industry earn from shows and right now, there are no shows.

“Again, there have not been too much help coming from government as regards the entertainment industry. By this I mean not directly. Yes, they might say they have provided an enabling environment for us to explore our talents and do everything, but that is minute, considering what they stand to gain from the industry.

“Government knows that the industry is a very vibrant one and to tax it, they must support it in any way. Do they actually know how many people bring out songs on a daily basis, how many videos are produced and pushed into virtual space? Somebody somewhere that doesn’t know how these things work just wake up and decided that the industry should be taxed. But it does work that way.”

He continued: “Theoretically, they have calculated the number of songs, just like the movies, and estimated their values in naira. A lot of youths who are not employed have managed to create something for themselves in the industry and government is now coming to tax them.

“That is not fair; the country is a mess due to bad leadership and governance.”

For the Chief Executive Officer of Achivas Entertainment, Paul Cole Chiori, also known as Ossy Achivas, it is a very wrong move and government cannot reap where it did not sow.

“These are people that actually created their contents without any form of assistance from the same government that is now coming to tax them. Asking them to start paying for what they have created is very wrong to start with.”

Sultan

“Government has not in any way supported them. So, for me it is a very wrong move. As matter of fact, they don’t have the interface to monitor what people are doing, except they start looking at talents by themselves,” Cole added.

The LSFVCB had in a bid to get content producers in the state to duly register their contents with the body, issued a 30-day notice, which has sparked off reactions from stakeholders in the entertainment industry.

LSFVCB Executive Secretary, Mr. Bamidele Balogun, who gave the notice while unveiling a platform by the Performing Musicians Employers Association (PMAN) and Lafrique Promedia to track and generate revenue for the entertainers, said: “The Board will advise practitioners involved in production, sale, distribution of audio and visual products to register their products through the Board’s authorised agent within 30 days.

“Practitioners and stakeholders are also informed that henceforth, all audio and visual contents produced and sold within Lagos State shall attract the payment of five per cent levy on each item.

“This exercise will, however, assist the Lagos State Government in policy formulation, with regard to planning and funding for the sector.”

While calling for the cooperation of stakeholders to achieve the goal, Balogun warned that violators/defaulters would face severe sanctions by the Board, adding: “All practitioners and stakeholders in the entertainment sector within the state are advised to comply with this directive and cooperate with the authorised agent of the board.”

Following the continued reactions that greeted the announcement, LSFVCB assured stakeholders that there is no cause for alarm, saying the proposed registration of contents is for the benefit of everyone.

Balogun said the initiative is not a stand-alone, but a part of the efforts of the state government, to ensure a comprehensive, all-embracing policy initiative designed to resolve all the current challenges facing the industry, such as piracy, effective distribution, productions funding, inter and intra-guilds and associations discipline to curb the all comers and all systems go affairs.

He stated: “The comprehensive policy initiative also encompasses mass job creation, profitable investments guarantee and accelerated rural areas development.

“The piecemeal announcement of contents registration was a communication gap that creates the unfortunate impression of a levy without corresponding benefits, which is contrary to the state government’s plan, through the Board, for a rejuvenated industry duly empowered to function and regularly contributing to the creative and economic wellbeing of the stakeholders, investors, general public and the country as a whole.

“Right now, the comprehensive policy initiative is being perfected alongside wide consultation of the entire spectrum of the industry’s stakeholders. In the meantime, we call on the stakeholders to await the Board’s comprehensive new policy and not pre-judge based on the contents registration only.”

LSFVCB claimed to have come up with the decision after due consultation with PMAN, but the association’s President, Pretty Okafor, rejected the new directive, saying entertainers already pay income tax, like other Nigerians.

He added that PMAN was not collaborating with the LSFVCB to ‘fleece’ entertainers of five per cent of their hard-earned money and was not part of the arrangement, adding that the body would soon take legal action.

“Who are the people teaming with the film and censor’s Board to do that? That is an illegality upon illegality. The Board was wrong to have met with some people who claimed to be from PMAN. This is a plot to defraud people or impose double taxation.

“So, that will not stand and our lawyers will write them soon. Who did they negotiate with? Definitely not with us, because we will never defraud people. Why are they taxing content producers when they are already paying personal income tax and VAT?

“Why are they charging five per cent? Does it even make sense? The agency doesn’t even have the authority to tax anybody. Why would people just gather and decide to perpetrate fraud?” he queried.

Meanwhile, the National Film and Video Censors Board (NFVCB), the federal government agency saddled with the responsibility of classifying, censoring and registering movies, described the new tax policy as a wrong approach.

Executive Director of the NFVCB, Adedayo Thomas, in a telephone conversation with The Guardian, said the Lagos State Ministry of Arts, Culture and Tourism did not know anything about the policy, noting that the tax announcement was an under-talk being used to test waters.

He stated: “It is a very wrong approach to the creative industry. Since the inception of President Muhammadu Buhari, there is a policy of Ease of Doing Business, which is global, and one of the cardinal points of that policy is eradicating double taxation.

“Lagos State has keyed in into that policy right from the administration of Asiwaju Bola Ahmed Tinubu as governor and has harmonised its taxes that even the local governments have limits to the things conceded to them, as long as you are paying the regular thing to the state.

“The same thing happened with the current ‘Ease of Doing Business’ policy, which is why you see businesses growing day in, day out.

“So, I don’t know why someone will sit somewhere and come up with a policy that will kill the creative industry that has occupied a very larger space in the development of this country.

“The highpoint is that the creators of these contents have to pay five per cent levy on every of their content. The begging question is: How do you tax an intellectual property right of somebody that has not come into bear? It is a very wrong approach.”

Thomas further said there is an existing court judgment that restrained the LSFVCB from censoring and regulating films, noting: “So, I think the LSFVCB should look in the direction of cleaning the environment for those who are making it in the ecosystem, especially in the film business.”


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