Influencers Targeted by Kenya’s New Finance Bill 2023

Instagram Reels vs TikTok
Instagram Reels vs TikTok

The Value Added Tax Act introduced in 2013 and a digital/electronic component was added in 2020. Another change was proposed – the VAT (Electronic, Internet, and Digital Marketplace Supply) Regulations, 2023 in line with the current government’s plan to expand its tax base.

The 2023 regulations made it clear that the digital VAT will comprise of supplies made over the internet, an electronic network, or any digital marketplace. There’s a new update which clarifies what exactly is covered.

According to the proposal, content creators will have to pay 15% on their online earnings. It goes on to add that digital content monetization means offering for payment entertainment, social, literal, artistic, educational or any other material electronically through any medium or channel.

This includes advertisement on websites, social media platforms or similar networks by partnering with brands including endorsements from sellers of such brands.

It was previously 5%.

Platforms that allow sale or transfer of digital assets like crypto or NFTs such as YellowCard, Coinbase Exchange or Binance will have to register with KRA and withhold tax deductions and forward it to the tax regulator within 24 hours.

It’s worth noting that cryptocurrency is not legal tender in the country and that the government won’t offer protection if things go bust.

There’s a silver lining though as the government has started working on a comprehensive oversight framework on crypto assets activities and players in Kenya.

If parliament passes this bill, them the taxes will take effect starting July 1st according to the National Treasury.

NOW READ: New Kenya Law Proposes Expansion of Digital Marketplace Tax Base