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Insurer to pay Sh0.5m for using man’s photo

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Kenya Orient Insurance Limited managing director Muema Muindi. FILE PHOTO | NMG 

Kenya Orient Insurance Limited will part with Sh500,000 in compensation for using a photo of its client on its social media page without his consent.

Milimani Commercial Court senior principal magistrate Addah Obura slapped the judgment on the insurance firm after establishing that it irregularly used the image of one Kevin Kimani Mungai on its Facebook page.

The claimant won the case he had filed against the insurer through lawyer Titus Koceyo, which the court said was a unique one.

Mr Koceyo told the court that the company posted Mr Mungai’s photograph for a promotional advertisement without consulting him first.

“The advertisement ran from October 18, 2013 and received over 18,700 likes and visitors for the defendants (Kenya Oriental Insurance) own economic gain,” said Mr Mungai through his advocate.

He told the court the insurer took his photo when he went to collect a mobile phone, which he had taken for repair.

The device had been insured with Kenya Orient.

Upon inquiry as to why his photo was being taken, he said the insurer told him “it was proof they had repaired the phone to avoid any future claims”.

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“However, he was allegedly surprised when he later received several calls, e-mails and communication from family and friends asking whether he is advertising for the defendant,” Ms Obura stated in her judgemnt.

The magistrate said the company admitted that it had taken the photograph of the plaintiff (Mungai) and posted it on the Facebook page though not for economic gain.

The insurer defended itself saying it was customary for it to post events touching on their mobile products — a fact which the plaintiff was well aware of.

Kenya Orient urged the court to dismiss the compensation claim against it as Mr Mungai did not suffer any loss or damage.

In the judgement, the court observed there was no evidence of consent to post the photograph from Mr Mungai.

“Such consent was necessary,” Ms Obura ruled.

The court concluded that the photographs posted in the company’s social media page was to gain financial mileage in their business.

“This clearly is a form of marketing in the eyes of an ordinary man. Orient is in the insurance business…It is not convincing that they were merely advertising and were not gaining anything from such visits to their Facebook page,” she added.

“In view of the foregoing I hereby enter judgement in favour of Mr Mungai in the sum of Sh500,000 plus costs and interest.”



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Lights, camera, action! Artistes brighten economy

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Covid-19 had negatively impacted entertainment revenues.

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KRA must ease tax filing to boost revenues

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Nikhil Hira Independent tax consultant and Director Bowmans Coulson Harney (law firm). [Courtesy]

Anyone who has been following Kenya’s budgets over the last few years will recall headlines each year saying that the country has set its largest-ever budget. 

The upcoming 2021/22 fiscal year is no exception, with Treasury Cabinet Secretary Ukur Yatani announcing a budget of Sh3.6 trillion – yes, the biggest ever! A little over Sh2 trillion will come from government revenues, with approximately Sh1.8 trillion of this from tax revenues. 

The balance will be borrowed – another common feature of the last few years. 

This year’s budget comes amidst an economic crisis brought on by the Covid-19 pandemic, with the inherent assumption that the pandemic will come to an end before the start of the next financial year. 

Given surges in infections that are being seen globally, and indeed in Kenya, this assumption may well be the deal-breaker. 

The Ministry of Health has already said that Kenya may see another wave of infections in July, fuelled by the Indian variant. This could result in more lockdowns with the associated impact on the economy and indeed revenue collections. The lack of vaccines is an issue that the government must address as a matter of great urgency if the country is to get through the pandemic without further economic woes. 

While deficits in government budgets are not uncommon, Kenya seems to be annually widening the gap between expenditure and revenues. 

If one applies this model to their household budget, the upshot will almost certainly be bankruptcy. 

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What is actually required is curtailing recurring government expenditures, which is something that the government has acknowledged in the past with proposed austerity measures. 

The reality is that Kenya has not succeeded in doing this, and the pressure on revenue collection is exacerbated. 

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When you add to the high level of wastage and corruption we are witnessing, the deficit will almost certainly continue to widen. 

The responsibility for tax collection and enforcement lies with the Kenya Revenue Authority better (KRA). 

There is no doubt that the authority has improved significantly in this task since it was set up in 1995. 

The taxman estimates that 4.4 million tax returns were filed by June 30 last year, up from 3.6 million in the previous year.  While this is a significant improvement, when compared to the country’s population, this number of returns seems unusually low. 

The increase in the number of tax returns, is to a large extent, due to the online reporting system, iTax, and a major push by KRA through taxpayer education.

There is no doubt that the online system has made filing tax returns significantly easier and gone are the large queues of people witnessed at Times Tower on deadline day. 

That said, there is still much to be done to make filing returns a seamless and painless exercise. 

System downtime during filing periods is something that all of us will have experienced, although, in typical Kenyan fashion, we inevitably wait until the last day to file our returns as we do with most things! 

The spreadsheet that one uses to file a return is by no means the simplest to use.  One key issue seems to be that taxpayers are not alerted to changes in the model until they try to upload a return. 

The spreadsheet does not allow one to make it more relevant to their sources of income – in essence, it is too rigid and inflexible. KRA should be able to rectify this without too much effort.

Last year was unusual in that different rates of tax were applicable in the first quarter as compared to the rest of the year.  This followed the Covid-19 relief measures that were introduced in April 2020. 

There was much debate about whether the changes were meant to apply for the whole year or whether some form of apportionment was needed. 

In the end, the decision was made for apportionment. One can argue about what the correct treatment should be, but the issue was how long it took for the decision to be made and, indeed, to amend the iTax system. 

The age-old notion has always been that the more complex and difficult it is to file a tax return, the more likely it will be that taxpayers simply won’t file their returns. While the issue with the system has been resolved, there is an inherent administrative issue here that must be addressed. 

KRA has to be significantly more proactive in dealing with changes in rates and law to ensure the least inconvenience to taxpayers. 

The writer, Nikhil Hira, is the Director of Bowmans Kenya.

The views expressed in this article are the author’s and not necessarily those of Bowmans Kenya  

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The age of gentrification is truly upon our country

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Never mind the businessmen outside Nairobi could be richer. Rural folks aspire to one day moved to a new county (city).

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