Kenya: New tax frustrates digital content creators

New legislation introducing a 15% tax 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 many youth are actively exploring the income-generating niche.

President William Ruto signed the Finance Act, which contains the new legislation, 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.

'Government is not doing right by taxing someone's creativity'

Content creators have 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 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," added Nikita, who has just under 400,000 followers on TikTok.

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 Kenyans make over 100,000 [shillings — $660/€630]] 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 said they believe the government would ultimately gain more in the long run if it were to support creators, rather than tax them.

Digital 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 said they have no problem paying taxes, 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, has also advocated for government support. The politician who is popularly known as Jalang'o, has even called on parliament to annul the 2023 Finance Act. 

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?" he 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