Taxing Hard Drives, Sparing the Net

BIG BEN

Namibia’s draft copyright and related rights protection bill proposes a major change in how local artists are compensated.

The government wants to create a safety net for creators by introducing a levy on physical equipment and services used to copy data, including phones, laptops, memory sticks and copy shops.

This is the stage at which the public needs to engage. Once the bill reaches the parliament, opportunities to correct its shortcomings become far more limited.

Supporting underfunded artists is a worthwhile objective, but the draft has a significant blind spot. It builds an extensive system to tax physical hardware while giving online platforms and streaming services – where music is now primarily stored and shared – a free legal pass.

An office worker buying a USB drive for documents could end up paying more to support the creative sector, while music continues to circulate freely on platforms such as WhatsApp.

Does that make sense?

How the law plans to collect

Section 67 establishes a cultural fund managed by the Business and Intellectual Property Authority (Bipa).

Under section 69, the fund will be financed mainly through levies on imported or locally manufactured digital storage devices and on commercial copying services.

That means the neighbourhood copy shop where people print CVs could face additional registration requirements and levies – costs that may ultimately be passed on to customers.

Section 70 extends the levy beyond blank CDs and USB drives to include the internal storage of computers and other devices. Section 72 goes further by requiring payment even if a hard drive contains only business documents and no copyrighted material.

The benefit

For local artists, the proposal offers clear advantages. With digital streaming having eroded physical album sales, section 68(1)(g) uses levy revenue to compensate creators for private copying of their work. The same fund would also support grants, legal aid and the development of local creative projects.

The problem
The weakness is that physical storage is becoming less relevant. Cars no longer rely on CDs or USB drives. Modern vehicles and computers increasingly connect directly to the internet, allowing users to stream music or access files stored in the cloud.

By taxing physical storage under section 70, the law targets technology that is steadily disappearing. The result is higher prices for smartphones, laptops and other essential business tools, while encouraging consumers to rely even more on cloud-based services.

A free pass for online platforms

The draft largely ignores the platforms where music sharing actually occurs. Songs are routinely exchanged through WhatsApp or stored on services such as Google Drive, yet these platforms remain protected.

Section 57 creates a ‘safe harbour’ for internet providers and online platforms. As long as they remove infringing content after receiving a formal complaint, they are generally not liable for material uploaded or shared by users.

This creates a contradiction. The law taxes physical devices because they are easy to regulate at the border, while leaving major digital platforms outside the levy system.

Heavy regulation for small businesses

The draft also introduces extensive compliance requirements for local businesses. Section 71(2) requires copy shops to register every machine and its physical location with Bipa.

Section 5 allows inspectors to audit up to three years of business financial records, while section 4 grants inspectors powers to examine personal computers during copyright investigations.

The result is a proposal that supports artists but shifts much of the financial and regulatory burden onto ordinary consumers and small businesses.

Rather than addressing where copyright infringement increasingly occurs – online – the draft attempts to solve a cloud-era problem with a system built around physical hardware.


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