Tsunami of taxes

By Kim Harrisberg | South Africa correspondent

Kenyan influencers’ popularity may soon be costing them, with the government recently proposing new taxes targeting the digital economy, including for content creators.

Under the Finance Bill 2023, multiple amendments aim to grow the government’s tax base which has seen substantial deficits resulting in even government salaries being delayed.

Taxation of payments made to digital creators will stand at a withholding tax rate – tax paid by the payer – of 15%, compared to 5% for professional services, according to the new legislation, TechCabal reported.

The definition of “digital content” has been expanded to include offering payment for an array of online services including entertainment, education, artistic or social content.

This could include adverts, sponsorships, subscriptions, brand partnerships, social media posts, merchandise sales, as well as a 3% tax on cryptocurrencies and non-fungible tokens (NFTs).

Kenyan crypto advocacy group Cryptocurrency Kenya said on Twitter the tax was “targeted harassment“.

The government has previously said it does not recognise crypto as legal tender and will not offer any protection to crypto users if the digital currency collapses, TechCrunch reported.

In recent months, however, the government has suggested working on a legal framework for crypto assets, which will likely facilitate the upcoming taxation strategy.

“The proposed Finance Bill by the Kenya Kwanza Regime is a punishing burden on Kenyans,” tweeted Raila Odinga, an opposition politician in Kenya.

“The tsunami of taxes will suffocate the jobless youth and the poor,” he added.