YouTube has announced plans to deduct United States (U.S) taxes from payments made to all creators including those who live outside the region.
The new tax is set to affect Kenyan content creators, most of whom have continued to rake in millions as online content consumption hit a crescendo during this pandemic period.
One of the email sent to the content creators in Kenya read thus:
“We are reaching out because Google will be required to deduct U.S. taxes from payments to creators outside the U.S later this year (as early as June 2021). Over the next few weeks, we’ll be asking you to submit your tax info in AdSense to determine the correct amount of taxes to deduct, if any apply. If your tax info isn’t provided by May 31st,2021, Google may be required to deduct up to 24% of your total earnings worldwide,” the e-mail read.
Kenyans.co.ke spoke to Digital Enabler Richard Njau to understand what this new move by YouTube would mean to Kenyan YouTubers. Njau runs Cleaning The Airwaves (CTA), a channel on YouTube.
“This has already been happening for those of us under an aggregator. In December I lost close to 20% of my earnings. I am not complaining though because the CPM on my videos is much higher because of the U.S audience,” Njau said.
He went on to explain that the tax would only affect the revenue generated through U.S viewers.
“For example if your video gets two million views, but one million of those views are from the U.S, then you will pay tax from the revenue acquired through the one million U.S views,” Njau said.
Kenyan YouTubers have taken to social media to express their dissatisfaction arguing that they do not reside in the U.S, and therefore would not be benefiting from the taxes they will pay to the foreign country.
“24% of your YouTube earnings getting taken from you when you earn third world CPM rates is unfair.Yet you put in the same efforts and dedication as U.S creators,” a YouTuber wrote on twitter.
While speaking to Kenyans.co.ke, Njau explained that CPM (Cost per thousand or Cost Per Mile) rates vary from location to location depending on the advertisers in the space.
“If a country has more advertisers then the CPM rates are higher compared to countries where there are few advertisers,” Njau said.
The amount of money that non-U. S YouTube creators will lose to tax will depend on whether they file their U.S tax information, whether their country has a tax treaty with the U.S, whether they are an individual or a company and also how much income they get from U.S viewers.
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