In Kenya, content creators, including skitmakers, digital creators, and TikTok influencers, are now required to pay a 1.5% tax on their social media earnings, according to the country’s newest Finance Act. The Kenyan government implemented this law despite significant opposition.
Over the years, content creation has expanded, with creators making a living through sponsored content, digital campaigns or ad revenue from platforms like YouTube, TikTok, and Facebook. And the rise in popularity of content creation amongst Kenyans, particularly on social media platforms, likely grabbed the attention of the government. Content creators often garner significant payouts from brands they promote, a portion of which will now be taxable.
The legislation outlines “digital content monetisation” as the provision of entertainment, social, literary, artistic, educational, or other material digitally via any medium or channel in exchange for payment. This could be accomplished through a range of methods such as website ads, social media platforms, brand partnerships, affiliate marketing, subscription services, merchandise sales, exclusive content membership programs, licensing content like photographs or music, user-generated projects, and crowdfunding initiatives.
Content creators in Nigeria faced a similar scare last week when Federal Inland Revenue Service (FIRS) branded them as a “major block of tax evaders.” However, FIRS soon clarified that it did not plan to tax individual content creators as such taxation falls under state government jurisdiction, while FIRS focuses on companies earning profits exceeding ₦25 million ($16,638).
While FIRS presses on with a new technology-driven system to modernise tax administration and enhance taxpayers’ experience, individual content creators are exempt from its taxes. Nevertheless, Nigeria’s tax policies continue to evolve. In July, President Tinubu appointed Taiwo Oyedele, PwC’s Fiscal Policy Partner and Africa Tax Leader, to helm a tax reform group with a goal of achieving an 18% Tax to GDP ratio within three years.
