The national government is seeking to impose a five percent tax on online content creators, a move that has sent shock waves to the digital community.
The tax is applicable to individuals and business owners generating income from online content creation including, sponsorships, content monetization and advertising revenue.
The government is seeking to tap into the ever-expanding online ecosystem, which has witnessed a surge in content creators across various platforms like TikTok, YouTube and social media, Instagram, blogs and many others thus the decision to impose taxes.
The Finance Bill 2023 had initially intended to impose a 15 percent tax on the collections trade by content creators but after complaints from citizens, the tax was reviewed and reduced to five percent.
Many content creators see fluctuations in income each month, and their taxes can quickly become complicated. The expenses that they incur as content makers- from ring lights to make up products- may be unfamiliar to the government as they impose taxes.
Speaking to KNA, Githuki wa Nyokabi, a Murang’a based content creator with a significant following on YouTube said that the newly imposed tax could adversely affect their ability to sustain their creative endeavors.
‘As content creators, we invest a significant amount of energy, time and resources in producing high-quality content that resonates with our audience,’ he said.
Wa Nyokabi further elaborated on the financial implications stating, ‘The five percent might seem small, but when you consider the expenses involved in creating content, it is a significant amount,’ he said.
He further added, ‘From equipment and marketing costs to collaborations, content creators already face numerous challenges. This additional tax might make them seek alternative sources of income because their pay will reduce significantly.’
Wa Nyokabi divulged that Youtube company currently tax nine percent of revenue generated by content creators who are using AdSense, a google program that lets creators in the Youtube partner program get paid.
‘The government is going to tax us five percent and Youtube is already taxing content creators nine percent, it means we are being taxed 15 percent in total from our income,’ he said adding these charges are exclusive of bank charges that they also incur when money is being transferred to their local bank of choice.
He further said that the cost of Internet is very high hence making production cost of their content quite high.
Wa Nyokabi asked the government to reconsider its decision in order to enable young and upcoming content creators to be motivated to be self-employed in the digital era so that they can sustain themselves and make a living.
In response to concerns raised by content creators, the government emphasized that the tax is part of their broader strategy to generate revenue and ensure fairness in taxation across different sectors.
The government has indicated that it is open to engaging with content creators to address their concerns and explore potential solutions. A recent event at State house, Talanta Hela, shows the government’s willingness to keep their promise.
Balancing the need for revenue generation with fostering a nurturing environment for creativity and innovation will be crucial for the government but only time will tell how this tax policy will shape the future of content creation in Kenya.
Source: Kenya News Agency