Kenya’s President William Ruto has ordered for a review of the Finance Bill 2023 proposing a 15% tax on digital content creators.
Speaking at StateHouse Nairobi where he presided over the national drama festivals, the president asked the Parliamentary Finance and ICT Committees to rethink the clause on taxing content creators.
“I know there is a proposal in this year’s budget on digital content, and creators are making a statement. I have told the ICT and Finance committee to work on it. Let’s them give a bit more space’’ Ruto said.
“We are going to work together in that space but we have heard you and we are going to work with you to make sure that does not work against what you want to do.” the president added.
Local content creators including bloggers, YouTubers, and social media influencers had protested the tax proposal saying that it will amount to double taxation.
In 2021, then President Uhuru Kenyatta gave the green light to the Value Added Tax (Digital Marketplace Supply) Regulations, 2020 draft. The law defined “digital marketplace supply” as any supply of a service made over a platform that enables the direct interaction between buyers and sellers of services through electronic means. It has a wide scoop of taxable services from downloadable digital content to subscription-based media.
The Kenya Revenue Authority (KRA) even went ahead and formed a special unit that will oversee tax collection from digital companies. The unit ensures digital marketplace players pay taxes as the taxman finds more ways to meet his tax expectations.
According to the new proposed bill, the scope of digital content monetization has now been expanded to include payment gained from Advertisements on websites, social media platforms, and other outlets, brand sponsorships, and affiliate marketing.
Others include subscription services where the audience pays a regular fee to view the content, crowdfunding for a creator and membership programs
“A person who is required to deduct the digital asset tax shall, within twenty-four hours after making the deduction, remit the amount so deducted to the Commissioner together with a return of the amount of the payment, the amount of tax deducted, and such other information as the Commissioner may require,” the proposed the Finance Bill reads.