Ruto’s Finance Bill to hit content creators hard
Kenya’s digital content creators face taxing times as President Ruto’s bill targets them.
President Ruto’s Finance Bill 2023 proposes a raft of taxes that will have a major impact on Kenya’s digital content creators and owners of platforms that facilitate the trading of digital assets.
The proposal includes a 15% withholding tax on payments related to the monetisation of digital content, which will significantly impact the thousands of young people who make their living in the digital space.
“A person who is required to deduct the digital asset tax shall, within twenty-four hours after making the deduction, remit the amount so deducted to the Commissioner together with a return of the amount of the payment, the amount of tax deducted, and such other information as the Commissioner may require,” the Bill states.
It also adds that any person who receives rental income on behalf of the owner of the premises shall deduct tax and within 24 hours remit the amount to the taxman. This cuts the period the rental income tax is paid from the 20th day of the month, as has been the case.
In addition, businesses with revenues as low as KES 500,000 will see an increase in turnover tax from 1% to 3%, affecting many small and medium-sized enterprises (SMEs).
If passed and implemented, the bill would also mean an increase in income tax from 30% to 35% for those earning at least KES 500,000.
The move could make it harder for Kenya’s middle class, especially young digital content creators, and SMEs.
The Bill proposes a 3 percent deduction from workers’ basic salaries towards the National Housing Development Fund, to which the employer will make an equal contribution.
“An employer shall pay to the National Housing Development Fund in respect of each employee, the employer’s contribution at 3 per cent of the employee’s monthly basic salary and the employee’s contribute,” the Bill states.
Consumers of various products will also pay more if the Bill’s proposals are adopted and enacted into law.
Among new products proposed to attract Excise Duty in the new financial year include imported fish (Sh100,000 per metric tonne or 20 per cent of the value) and powdered juice (Sh25 per kilo).
Those who consume beauty products such as wigs, false beards, eyebrows and eyelashes, and artificial nails will be hit with a 5 per cent excise tax, as the government goes harder on the industry that has over the past decade grown significantly.