Content creators could soon be facing an additional tax burden if the proposed amendments to the 2023 Finance Bill are signed into law by the President. Under the proposed changes, content creators who earn income through digital content monetisation will be required to pay a 15% withholding tax.
According to the Bill, any payment received by content creators for entertainment, literary, social, artistic, or educational material through any medium will be subject to the tax. This includes income earned through affiliate marketing, content licensing, and brand sponsorship. Additionally, content creators who offer subscription services, membership programmes, or sell merchandise will also have income made from these mediums taxed.
Since taking office in September 2022, President Ruto has been working to boost Kenya’s digital economy and increase revenue collection for the country. In November 2022, he revealed that he was targeting the Kenyan Revenue Authority (KRA) to increase its revenue collection to between Sh4 trillion and Sh5 trillion. This comes after the KRA exceeded the Sh2 trillion mark for the first time in June 2022.
While some content creators have already been paying taxes following the introduction of the digital services tax in 2021, it is still unclear whether the proposed amendments seek to tax every content creator regardless of the amount earned. The Bill also aims to tax earnings from the trading or transfer of digital assets, including cryptocurrencies, which are classified as digital assets under the new regime.
If the amendments to the Finance Bill are approved, content creators in Kenya may face a new financial burden in addition to their existing tax obligations.
