The Finance Bill 2023 has proposed amendments expected to affect digital content creators, influencers, and online entrepreneurs who generate revenue from digital content monetisation.
The bill introduces a new definition of “digital content monetisation” and proposes that payments for sales promotion, marketing, and advertising services, the aggregate value of which is twenty-four thousand shillings or more in a month, will be subject to a five per cent tax on the gross amount.
Additionally, payments relating to digital content monetisation will be subject to a fifteen per cent tax.
The bill aims to increase the government’s revenue collection by tapping into the rapidly growing digital economy in Kenya.
According to the bill, 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:
- advertisement 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;
- merchandise sales where physical goods and services are sold featuring a logo, brand or catchphrase to the audience of the content creator, 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; or
- crowdfunding for raising funds for specific goals for a content creator or another person.
The proposed amendments will come into effect once the Finance Bill 2023 is passed into law by the President of Kenya.