President Williams Ruto of Kenya has ordered for a review of a proposed 15% tax on digital content creators enacted by his predecessor, Uhuru Kenyatta which was captured in the Finance Bill for 2023.
The controversial proposal which raised a lot of dissent in the country, would see local content creators, including bloggers, YouTubers, and social media influencers, paying a 15% tax, with many saying it will amount to double taxation.
The proposal was approved in 2021 by then President Kenyatta who gave the green light to the Value Added Tax (Digital Marketplace Supply) Regulations, 2020 draft.
The bill 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.
According to the proposed Finance 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.”
But while speaking during the National Drama Festival at the State House in Nairobi on Friday, Ruto ordered 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,” President Ruto said.
“I have told the ICT and Finance committee to work on it. Let’s them give a bit more space,” he added.