Content creators and any business that operates online will be paying a15 percent tax in the new tax proposals to be tabled in Parliament.
This is a new effort by the Treasury Ministry in getting taxes from the emerging online users who have not been paying taxes to the taxman.
A draft proposal published in one of the local dailies by National Assembly Clerk Samuel Njoroge reveals key tax amendment laws from the National Treasury aimed at boosting social media and phone usage while addressing the cost of communication services.
The Tax Laws (Amendment) Bill, 2024, sponsored by the Leader of Majority Kimani Ichung’wah, imposes a 15 per cent in exercise duty fees charged on social media and internet services.
Should the proposal sail through Parliament, a 15 per cent tax would be added to the cost of any fees that are charged to users for accessing the internet or social media services.
Under the new proposal, telecommunication companies that provide internet services will likely see increased operational costs. These companies may pass on the tax to consumers, leading to higher data and internet bundle prices, which could hinder accessibility and affordability for many users. Internet service providers, serving both residential and businesses, might also raise subscription rates to offset the added expense.
Digital advertising and e-commerce sectors may also face significant impacts. As social media platforms potentially increase advertising fees to accommodate the tax, digital marketing firms, advertisers, and online retailers will bear the brunt of these costs. SMEs, freelancers, and influencers who depend on social media for client engagement, brand visibility, and sales could see their reach reduced due to higher advertising costs.
Also in the Bill is the proposal to reduce the amount of exercise duty charged on telephone and data services from the current 15 to 12 per cent.
Should this be passed by the lawmakers, then the cost of mobile usage services could slightly come down and enable Kenyans to access related costs at affordable prices.
