Proposed Taxation on Digital Content Monetisation Outlined in Finance Bill 2024
Eight online activities are expected to be taxed in the upcoming financial years based on proposals in the Finance Bill 2024.
According to the bill, which outlines the government’s taxation policies for the budget, significant activities by content creators will be regarded as income-generating and therefore taxable.
The proposal suggests that local content creators will be required to pay five percent of their earnings.
Among the activities identified are advertisements on websites or social media platforms through brand partnerships.
Content creators who are compensated by various companies to produce and promote content will also be taxed.
Additionally, content creators who earn commissions based on the number of clicks their audience generates during a promotion will have to surrender part of their earnings.
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“Digital content monetization refers to offering for payment entertainment, social, literal, artistic, educational or any other material electronically through any medium or channel, in any of the following forms;
“Offering for use a logo, brand, or catchphrase associated with the content creator, merchandise sales, eBooks, courses, or software, and licensing the content, including photographs, music, or other materials, to businesses or individuals for use in their projects,” the Bill states.
Moreover, content creators who charge their audience for exclusive content will also be subject to taxation.
Furthermore, special membership programs where the audience pays to access certain content first will also be taxed.
“Digital content monetization also includes a content creator earning a commission or fees from crowdfunding,” the Bill adds.
In some cases, companies hire content creators to lead campaigns aimed at raising funds for specific causes.
The Finance Bill was presented in Parliament on May 13, and Members of Parliament will discuss the tax proposals in the coming days. Kenyans will also have the opportunity to share their views on these tax proposals in due course.
The eight activities listed as Digital Content Monetisation are as follows:
- Advertisements on websites, social media platforms, or similar networks through brand partnerships, including endorsements from sellers of such brands.
- Sponsorships are where a brand owner pays a content creator for content creation and promotion.
- Affiliate marketing is where the content creator earns a commission whenever their audience clicks on the displayed product.
- Subscription services where the audience pays a periodic fee to access the content and support the content creator.
- Offering for use a logo, brand, or catchphrase associated with the content creator, merchandise sales, eBooks, courses, or software.
- Membership programs for exclusive content, including early access.
- Licensing content, including photographs, and music, to businesses or individuals for use in their projects.
- Where a content creator earns a commission or fees from crowdfunding.
Proposed Taxation on Digital Content Monetisation Outlined in Finance Bill 2024
