Digital content creators and influencers will now have to pay 15% of their earnings in tax in Kenya. But many are frustrated over the new legislation, calling it exploitative and a blow to their creativity.
New legislation that makes provision for the a 15% tax deduction on the earnings of digital content creators and influences is now in force in Kenya.
But it's not going down well in the country where the youth are actively exploring the income-generating niche.
President William Ruto signed the Finance Act, 2023, which max provision for the tax, into law in July.
"I think they should review the Finance Act because a lot of people will be suffering, especially creators and it will make it hard for us to get jobs that are going to sustain us," Samantha Dedra, a creator with more than 800,000 followers on TikTok, told DW.
A burden and an opportunity
Content creators argued that the new tax amounts to an additional financial burden.
"The government is not doing right by taxing someone's creativity. You can imagine when you're starting out, you are buying equipment from your savings, you are trying to tell stories, using your own platform," said Dedra. "Then you have to be billed on tax, just because the government is looking at it as an opportunity to make extra money."
TikTok creator Diana Nikita agrees. "In Kenya we do not have jobs. Even to go out there and create content, you will need money. So, I don't think they are being fair and currently, everything is being taxed in Kenya," she said.
"The economy is not doing so well, there is no money, there is no cash flow," Nikita, who has just under 400,000 followers on the platform said.
But Mark Otieno, a digital entertainment strategist and consultant, sees the new tax as an opportunity for the government to broaden its revenue streams.
"Did you guys know that only 86,000 shillings ($570) Kenyans make over 100,000 [shillings] a month, that is how poor people are in this country, so when someone says I am making 300,000 on YouTube they say you need to be paying tax like an MP, it is the lower ones who it will mean a lot to them," Otieno told DW.
Dedra and Nikita both say they believe that the government would ultimately gain more in the long run if it were to support rather than tax creators now.
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A industry on the rise
At the onset of the COVID-19 pandemic, the number of content creators on platforms such as Instagram, TikTok and YouTube began shooting up across Africa.
Many young Kenyans are now using these platforms to sell products and earn a living through monetization.
Some well-established content creators in Kenya say they have no problem paying tax but have appealed to the government to create an environment that nurtures and supports the digital economy.
Phelix Odiwuor Khodhe, a lawmaker from the Langata constituency of Nairobi, advocates for that too. The politician who is popularly known as Jalang'o is even calling on parliament to annul the Finance Act, 2023.
Posts by some content creators who flaunt what appear to be luxury lifestyles and talk about earnings online, could get in the way, he told DW.
"How do I convince the government of people who do not understand content creation that you don't have money and you are not able to pay the 15% tax when what you show out there is that you are millionaires?" Khodhe said.
This article has been adapted from a radio report that was originally broadcast on DW's daily radio show AfricaLink
Edited by: Benita van Eyssen
