By Victor Akan
President William Ruto has announced plans to tax Kenyan content creators benefiting from a monetisation framework introduced earlier this year. The move aims to include digital income earners in the tax bracket, marking a pivotal shift in Kenya’s approach to the digital economy.
Speaking at the 20th-anniversary celebration of the Kenya Private Sector Alliance (KEPSA) in Nairobi, President Ruto underscored the substantial earnings some creators are now making and argued for equitable taxation.
‘Some creators earn as much as KSh1 million [about $6,900]. If someone earning KSh20,000 or 30,000 pays tax, isn’t it fair for those earning KSh1 million to contribute to the tax kitty, especially when we’ve enabled that success? It seems logical to me,’ he remarked.
Expanding Kenya’s tax base
The government is advancing the Tax Laws (Amendment) Bill 2024, which seeks to integrate digital operators and online income earners into the tax system. This includes a proposed 15 percent excise duty on social media and internet services, a measure that could increase costs for millions of users, including small businesses.
The initiative stems from an agreement Kenya reached in April with tech giants Google, Meta, and TikTok. This partnership enabled local content creators to monetise their work on digital platforms.
‘Our youth possess immense creative talent, excelling in areas like music, digital animation, theatre, fashion, and even emerging fields like virtual and augmented reality,’ said President Ruto.
Cabinet Secretary for Treasury John Mbadi introduced the bill as part of efforts to widen the country’s tax base. The proposal follows the rejection of the contentious Finance Bill 2024, which sparked public backlash over its perceived burden on ordinary citizens.
Mixed reactions
The proposed digital taxes have elicited divided opinions. Supporters argue they will create a more balanced tax framework while critics warn of potential harm to Kenya’s burgeoning digital economy.
Some analysts fear the new taxes could discourage innovation in Kenya’s thriving creative industry. ‘The government must tread carefully to avoid stifling the very ecosystem it is trying to grow,’ one expert observed.
Balancing revenue and innovation
Kenya’s digital economy has witnessed exponential growth, driven by tech-savvy youth and increasing internet penetration. The proposed taxation aims to capitalise on this growth to address revenue shortfalls.
However, opponents argue that placing a significant tax burden on content creators and digital service users could deter investment and hinder creativity. The 15 percent excise duty on internet services, in particular, has raised concerns about affordability for low-income users.
As debates around the Tax Laws (Amendment) Bill 2024 unfold, the government faces the challenge of fostering a thriving digital economy while ensuring fair and sustainable revenue generation. The final decision will have far-reaching implications for Kenya’s online creators, small businesses, and overall digital landscape.
FOR ADVERT AND NEWS PUBLICATION, EMAIL US @ tarakirivoicenewspaper@gmail.com or call or WhatsApp us on 08160439769
