In a significant announcement, President William Ruto revealed plans to introduce taxes targeting Kenyan content creators who have benefitted from monetization deals with global platforms like Google, Meta, and TikTok. This move is aimed at creators earning substantial income from their online activities, with the goal of creating a more equitable tax system.
During a recent event in Nairobi, Ruto emphasized the importance of fairness in taxation. He pointed out that while many creators earn substantial amounts, others still contribute to the tax system despite lower earnings. “If you earn KSh 1 million, isn’t it fair to contribute to the tax kitty, especially when we’ve enabled you to reach that level?” Ruto questioned.
The proposed Tax Laws (Amendment) Bill, 2024, is designed to bring online income earners and digital operators into the tax bracket. This bill also includes a 15% excise duty on social media and internet services, a move that could raise costs for millions of users, including creators and small businesses.
Treasury Cabinet Secretary John Mbadi, who introduced the bill, explained that it is part of the government’s efforts to broaden Kenya’s tax base following backlash against the Finance Bill 2024 earlier this year.
Reactions to the proposal have been mixed. Some support the government’s efforts to ensure fair taxation, while others argue that it may stifle innovation and slow the growth of Kenya’s dynamic digital economy.
The debate over taxing the digital space is intensifying, with both creators and businesses closely watching the potential impact.
The outcome of this proposal will likely have long-term implications for Kenya’s digital landscape. The challenge will be to find a balance between generating government revenue and maintaining a thriving creative economy.
