The Proposed 15% withholding tax on Local Digital Content Creators Revised to 5%

Following the amendments made in the proposed finance bill by the finance and national planning committee, whose voting process is still in progress, non-resident digital content creators will be expected to pay a 20% withholding tax on income generated from content creation, as opposed to their local counterparts, whose withholding tax was revised to 5%.

Read more: Introduction Of Withholding Tax For Content Creators

Initially, the withholding tax for local digital content creators was proposed at 15%. However, while speaking before the floor of the house, the chairman of the national assembly finance and national planning committee, Mr Kimani Kuria, said that after listening to all the submissions made during the public participation process, the committee decided to revise the proposed tax down to 5% from 15%. He added that digital content creators are not exempt from paying taxes as per the Income Tax Act and are supposed to declare their income and file returns accordingly. This is after several members of parliament challenged the move to tax digital content creators by arguing that they should not be treated as just any other profession. “The 5% tax will apply to all professional fees, including management, legal, and accounting fees”, said Kuria.

Read more: The Cost Of Being A Content Creator In Kenya

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At the same time, the definition of digital content monetization was stretched further to include various types of content and services. For instance, digital content monetization now means offering payment for entertainment, social, literal, artistic, educational, or any other material electronically through any medium or channel. This includes various forms, such as advertisements on websites, social media platforms, or similar networks, by partnering with brands, including endorsements from sellers of such brands. Individuals earning commissions or fees from crowdfunding will also fall under the definition of digital content monetization.

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