Ruto Surrenders To Uproar By Content Creators On 15% Tax

President William Ruto on Friday, June 2 relaxed his hardline stance on content creators in Kenya by promising to review the proposed 15 per cent withholding tax for content monetization in the Finance Bill 2023.

Speaking during the Kenya National Drama Festival State Concert at State House, Nairobi, Ruto expressed his desire to turn around the content creation atmosphere in the country by making it into a space where content creators can earn a living from their craft.

He particularly directed the ICT and finance committees to go back to the drawing board on the proposal to tax digital content creators and practitioners with the aim of cutting down on the stubborn measures to enable content creators to thrive.

"We are working together towards monetizing the whole space around creatives. I know when I say monetizing, I know the taxman is also listening; whenever they see some people making money in some corner, they arrive. 

“I know there is a proposal in this year’s budget on digital content tax and creators are making a statement, I have told the ICT committee and finance committee to work on it. Let us give them a bit more space to work on it,” he announced.

Adding that “We are going to work together in that space but we have heard you and we are going to work with you to make sure that does not work against what you want to do."

Furthermore, Ruto promised to review the taxes on the cost of internet and phone calls to a level that permits content creators to even connect amongst themselves within the digital ecosystem to share ideas on how to better their craft and earn more money, all at cheaper rates.

"We are bringing down the cost of telephony and we are also reducing excise on the internet so that our creatives and the whole ecosystem around online work and engagement can be a lot easier and a lot cheaper," he added.

The President particularly singled out comedians Timothy ‘Njugush’ Njuguna and Eddie Butita for setting the stage for many other young people in the sector. Butita in particular owns a media company, SPM Buzz, dubbed the home of creativity and which is responsible for producing viral journalists such as Betty Kithinji (Miss Kithinji) and Liz Jackson.

"We have Njugush and Eddie Butita around, these are our great artists who today are monetizing their content.

"Those two young men are making more money than my salary. Don't look down on them because they've worn a t-shirt or any other clothing, those guys are serious entrepreneurs," he commended the duo.

He reiterated his commitment to mainstreaming internet connectivity across the country, promising to put up 25,000 internet hotspots in the next two years.

"We are going to have 25,000 hotspots around Kenya where the internet is going to be free. We have already done the first 50, by 2025 the Ministry of ICT promises me that by the end of 2025, we will have 25,000 free internet spots in the Republic of Kenya where people can work without having to pay," he promised.

Digital Media Practitioners Oppose Finance Bill

Ruto's remarks come days after digital media practitioners including Viral Tea's founder and editor-in-chief, Marvin Chege, in their petition before the Departmental Committee on Finance and National Planning during the public Hearings on the Finance Bill 2023, challenged the proposed tax which put digital content creators in a difficult position.

Chege had joined more than 50 individuals in presenting their views on the Finance Bill at the Kenyatta International Convention Centre (KICC) and argued that the proposals would strain the finances of content creators as well as digital native media houses (both startups and leaders) and endanger their sources of earning a living.

"For a digital media practitioner, the tax is a dangerous move, the quickest way to kill budding digital media startups in the country. If the government must tax, maybe a 3 or 5 per cent withholding tax just like other professional services, though really digital native media is something very new in the country.

"In addition, the tax might lead to hesitation in brands investing in content creators to advertise their services because they will have to pay more (increased rate card charges for content creators) to accommodate the taxes. This means that we lose money, and cannot sustain our brands and content, hence we shut down or sell to other business owners," he told the committee.