Content creators in Kenya may soon be required to pay a 15% withholding tax if certain amendments to the 2023 Finance Bill are approved by President William Ruto. Under the proposed tax regime, income earned through digital content monetisation will be subject to a 15% withholding tax.
The Bill defines digital content monetisation as any payment received for entertainment, literal, social, artistic, or educational material through any medium. Income earned through affiliate marketing, content licensing, and brand sponsorship will be taxed. In addition, content creators who offer subscription services, membership programmes or sell merchandise would have income made from these mediums taxed.
Since taking office in September 2022, President Ruto has spearheaded activities that have been intended to boost Kenya's digital economy as the East African country has struggled to generate revenue.
In November 2022, President Ruto disclosed that he intended for the Kenyan Revenue Authority (KRA) to increase its revenue collection to between Sh4 trillion and Sh5 trillion. The KRA exceeded the Sh2 trillion mark for the first time in June 2022.
Content creators are the latest group to be included in the tax bracket although many had already been paying taxes following the government's decision to introduce a digital services tax in 2021. However, it is unclear whether the Bill seeks to tax every content creator regardless of the amount.
The Bill also seeks to tax earnings from the trading or transfer of digital assets such as cryptocurrencies. Digital assets are defined as anything of value that is not tangible. Cryptocurrencies, token codes or numbers held in digital form and generated through cryptography are also classified as digital assets.