Foreigners slapped with higher digital content tax
Foreign content creators will pay four times as much in tax than their Kenyan counterparts should the Finance Bill 2023 sail through. FILE PHOTO | SHUTTERSTOCK
Non-resident digital content creators have been slapped with a steeper tax at 20 percent compared to their local counterparts whose withholding tax was reduced to five percent.
This follows amendments proposed by the Finance and National Planning Committee which are now part of the Finance Bill whose adoption vote continues in the National Assembly.
This means that foreign content creators will pay four times as much in tax than their Kenyan counterparts should the Finance Bill sail through.
Further amendments to the Bill have seen the definition of digital content monetisation altered to include offering a logo, brand or catchphrase associated with the content creator merchandise sales eBooks, courses or software.
Creators earning commissions or fees from crowdfunding will also fall under the definitions of digital content monetisation.
During voting, MPs rejected further amendments to the clause including a proposal to introduce graduated brackets of withholding tax for content creators based on their revenue generation up to a rate of 15 percent.
The Finance Bill describes digital content monetisation as offering for payment entertainment, social, literal, artistic, educational or any other material electronically through any medium or channel including advertisement of websites or social media platforms, sponsorship, affiliate marketing and merchandise sales.
Local digital content creators have earned a reprieve after the rubber stamping of changes to the rate of withholding tax on digital content monetisation from 15 to five percent.
At the public participation stage, stakeholders challenged the introduction of the levy noting that digital content creation was still a nascent industry.
