Eight online activities are set to be taxed in the upcoming financial years following proposals in the Finance Bill 2024.
As detailed in the bill which outlines the government's taxation policies for the budget, major activities by content creators will be considered as income-generating activities that are taxable.
The proposal is for local content creators to pay five per cent of their earnings.
Among the activities highlighted include advertisements on websites or social media platforms through brand partnerships.
Content creators who are paid by various companies to generate content and promote content will also be taxed.
Further, content creators who earn commission from the number of clicks made by their audience during a promotion will also have to part ways with part of their earnings.
"Digital content monetisation means offering for payment entertainment, social, literal, artistic, educational or any other material
electronically through any medium or channel, in any of the following forms;
"Offering for use a logo, brand or catchphrase associated with the content creator merchandise sales eBooks, courses or software and licensing the content including photographs, music or other businesses or individuals for use in the user’s own projects," read the Bill in part.
On the other hand, content creators who charge audiences for exclusive content will also be paying taxes.
Additionally, having special membership programmes where the audience is charged to access some content first will also be taxed.
"Digital content monetisation also takes the form of a content creator earning a commission or fees from crowdfunding," read the Bill in part.
In some instances, companies usually hire the services of content creators to drive a campaign aimed at raising funds for a particular course.
The Finance Bill was tabled in Parliament on May 13 with Members of Parliament set to discuss the tax proposals in the coming days. Kenyans will also be allowed to give their view on the tax proposals in due course.
The 8 activities listed as Digital content monetisation are as follows;
- Advertisements on websites, social media platforms or similar networks by partnering with brands including endorsements from
sellers of such brands. - Sponsorship where a brand owner pays a content creator for content creation and promotion.
- Affiliate marketing where the content creator earns a commission whenever the audience of the content creator clicks on the
product displayed. - Subscription services where the audience pays a periodic fee to access the content and support the content creator.
- Offering for use a logo, brand or catchphrase associated with the content creator merchandise sales ebooks, courses or software.
- Membership programmes for exclusive content including early access.
- Licensing the content including photographs, music or other businesses or individuals for use in the user’s own projects.
- Where a content creator earns a commission or fees from crowdfunding
