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Kenya is presently on a path to expand its tax base to mobilize more resources. As a sequel to this drive, the country’s 2023 finance bill has come out with a slew of proposals to expand the tax bracket
Kenya is presently on a path to expand its tax base to mobilize more resources. As a sequel to this drive, the country’s 2023 finance bill has come out with a slew of proposals to expand the tax bracket.
The Budget imposed a controversial proposal aimed at subjecting income earned through digital content monetization to a 15% withholding tax. It did not go well with the content writers, who decry the imposition of the tax as too high for a growing digital economy. They also complain that they get minimal government support in content creation.
Experts are of the opinion that the proposal will have major effects on the income earned by individual content creators and the growth of the entire digital economy.
They opine that the proposed digital service tax is a withholding tax of 15%. It is not the final tax. Again, digital content creators will be expected to pay further taxes based on their total income as computed from the book of accounts. The Finance Bill will be tabled shortly in parliament.
In the meantime, there are also general protests against the Finance Bill since people think it would further increase the cost of living. Recently, the Kenyan demonstrators marched in the capital as they protested against the cost-of-living crisis and the impact it will have in further escalating the cost of living with the imposition of new taxes. The proposed legislation calls for new or increased taxes on a wide range of items including fuel and food, beauty products, cryptocurrencies and social media influencers.
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President William Ruto is seeking to fill the government’s depleted coffers and repair a heavily-indebted economy inherited from his predecessor Uhuru Kenyatta, who splurged on major infrastructure projects. Ruto was the deputy resident of Uhuru Kenyatta. His government has drawn up a 3.6-trillion shilling (US$26.2-billion) budget for 2023-24 with the proposed new taxes expected to generate 289 billion shillings.
