Digital content creators will be required to pay a five per cent tax if the Finance Bill, 2023 passes into law.
A resounding majority of 183 MPs backed the amendments proposed in the Bill, which significantly reduced the tax rate from 15 to five per cent.
The 79 MPs who voted against the amendment highlighted the divided opinion surrounding the revised tax rate.
In the many storms that rocked the national assembly during Tuesday night's session, the five per cent digital content monetisation tax proposed in the Finance Bill, 2023, fractured the House across the political divide leading to a major division that forced a vote.
The chairperson of the session Gladys Shollei faced the challenging task of restoring order, as charged MPs engaged in heated arguments, causing a temporary disruption. It took several minutes for her to successfully guide members back to their seats, refocused and prepared to proceed with the crucial vote on the amendment.
The voting was intermittently stopped by members doing choruses on the vote hindering individual voting that requires one member to say yes or no.
Failing to contain the chorus, Ms Shollei decided to have members given handheld microphones when declaring their vote.
The chairman of the National Assembly Finance and National Planning Committee, Mr Kimani Kuria, said the five per cent tax rate applies to all professional fees, including management, legal, and accounting fees.
"All of them are charged at a withholding tax of five per cent," said Kuria.
Kuria argued that after listening to submissions during public participation, the committee amended the tax which was initially set at 15 per cent. He added that digital content creators are not exempt from paying taxes as per the Income Tax Act.
"They are still required to declare their income and file their taxes accordingly," said Kuria.
However, members, including Githunguri MP Gathoni Wamuchomba, argued that the tax was still unfair as it targets young Kenyans who should not be treated as other professionals as they working in an emerging industry.
"I still feel we are not being fair to this category of content creators. I still feel that this Bill probably needs to be looked at some more so that we can take care of this asset industry," said Wamuchomba.
Dagoretti South MP John Kiarie countered her saying: "If there is one thing that each and every one of the content creators agreed to is that there is there is a reasonable purpose for them to be equalized just like any other profession."
In what would have taken a just few minutes to complete, the national assembly ended up spending at least five times the amount of time it would have used after the digital voting system failed.
Kiharu MP Ndindi Nyoro asserted that the system has failed severally despite sufficient investment having been made to ensure the efficiency of the electronic system of voting.
"I'm wondering whether it is a coincidence because this house has invested a colossal amount of money to make sure we vote efficiently and digitally. I don't think this is normal," said Nyoro.
MPs started voting on clauses of the Finance Bill, which was in the house for its third reading, an exercise that started at 5pm.