Kenya’s Government Proposes New Bill To Tax Content Creators
The Finance Bill for 2023 in Kenya has proposed several amendments aimed at expanding the government's tax base to address revenue issues that have led to delayed employee salaries. One of the proposed changes is the taxation of payments to digital creators. With the growth of content creation, creators earn a living through various means, such as sponsored content, digital campaigns, or ad revenue from platforms like YouTube, Tiktok, and Facebook.
Currently, the Income Tax Act (ITA) defines certain digital payments that are subject to withholding tax, while others may not fall under the provisions of the ITA. The new proposed legislation suggests that payments made by taxpayers to digital content creators will be subject to a 15% withholding tax rate.
The proposed amendment also expands the definition of digital content monetization to include various types of content and services, such as entertainment, social, literal, artistic, educational, or any other material offered electronically through any medium or channel. This includes different forms, such as website advertisements, social media platform promotions, or endorsements from sellers of brands.
Under the new proposal, sponsorship is also considered digital content monetization, where a brand owner pays a content creator for content creation and promotion. Furthermore, the amendment proposes that affiliate marketing should also remit the new tax, where a content creator earns a commission when the audience clicks on the displayed product.