A proposed law in Kenya, the Business Laws (Amendment) Bill 2024, is stirring concerns among gig economy workers, including freelancers, digital creators, musicians, and taxi drivers. The Bill, which was recently tabled in Parliament, aims to expand the country’s tax net by officially classifying gig workers as employees, a move that could significantly alter how self-employed individuals are taxed and classified.
The Bill seeks to broaden the definition of an “employee” to include individuals earning wages in various capacities, whether remotely, on-site, or even for short-term engagements. “Employee means a person who is employed for wages or a salary and includes an apprentice, indentured learner, and a person who performs his duties remotely or on-site within a business process outsourcing arrangement or an information technology-enabled service,” the Bill states.
Under the proposed changes, gig workers—such as ride-hailing drivers, content creators, and freelancers—would be subject to statutory deductions like those imposed on salaried workers. This would extend the tax and benefit obligations traditionally applied to full-time employees to a broader group of workers, including short-term contractors.
The Treasury has defended the proposal, arguing that it would “create a conducive environment for doing business.” However, critics fear that the changes could impose additional financial and administrative burdens on both freelancers and the companies that hire them.
The Bill also introduces a requirement for employers to provide gig workers with tools and equipment to perform their duties. “The employer shall ensure that an employee working remotely or on the employer’s site is provided with the necessary tools, equipment, and resources to effectively perform his duties,” it reads.
Additionally, the legislation redefines a “self-employed person” as anyone earning income outside a formal contract, bringing informal sector workers like musicians and boda boda riders under new tax obligations.
Treasury Cabinet Secretary John Mbadi has emphasized the need to tap into new income streams without increasing direct taxes, warning that higher tax rates could reduce consumer spending. “We cannot continue increasing rates on direct income, employment income, or other direct taxes,” he said.
