Content creators will soon start earning big from the government, with President William Ruto announcing that 10 per cent of the government's advertising budget would go to content creators, which amounts to Sh30 billion.
The announcement was made this week when the President met black YouTube content creators in State House from the UK, Canada, the US, South Africa, Nigeria and Kenya. The announcement was met with applause, with creators expressing gratitude for the move by the government.
In another move that content creators have welcomed, the tax that they will be expected to pay has been reduced to 3 per cent. Initially, it had been announced that content creators would be required to pay 15 per cent withholding tax on income earned from digital content monetisation if amendments to the 2023 Finance Bill were made.
According to the Bill, digital content monetisation is any payment received for entertainment, literal, social, artistic, or educational material through any medium.
That means that income earned through affiliate marketing, content licensing, and brand sponsorship will be taxed. Income from subscription services, membership programmes or sale of merchandise will also be taxed.
The proposal was met with an outcry from creators. Speaking at the meeting with the creators at State House, Agnes Gathaiya, Google's Country Director for Kenya and Eastern Africa, spoke to the President on behalf of the creators, urging the government to discuss the issue.
"Regarding the proposed 15 per cent withholding tax on the revenues of digital content creators, on behalf of the creators, we urge meaningful dialogue between the industry and parliamentarians to review the proposal and support and protect this nascent industry," she said.
The review came earlier than they probably expected, as during the tabling of the Finance Bill this week, National Assembly Finance and Planning Committee Chairperson Kuria Kimani announced that the creators would be getting a reprieve.
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"Clause 24 introduced digital content monetisation at a withholding tax of 15 per cent. However, if you compare the withholding tax in other professions, whether it is legal fees, accounting, fees management fees, and all the other professional fees withholding tax of all these particular fees is at three per cent," said Kuria.
"And that is why we found that charging digital content creators at 500 per cent more was unfair and punitive to this growing sector and we propose that withholding tax be reduced to three per cent."
Tax could not be completely scrapped, with President Ruto saying that other members of society pay tax as well and that the government needs to generate revenue to run the country.
The creators have therefore welcomed this move to reduce the tax, in addition to the decision to use 10 per cent of the government's advertising budget on content creators.
Sebatstian Ngida, a Youtuber who runs the channel, 'The Kenyan Entrepreneur', and was part of the YouTube Black Voices Class of 2023, described the decision as amazing, while also saying that there needed to be more conversations about how the money was going to be spent.
"Is this money going to be used to advertise on real estate channels? Is it going to be on health channels? Is it going to be on tech channels? There has to be some form of clarity around it because if you just say, 'We are going to spend Sh30 billion on advertising and then the top 50 creators in the country are the ones who are benefitting, then it's not helping anyone," Sebastian (Seb) told Pulse.
He added that another issue that is needed is representation, where creators are involved or consulted in the decisions that the government is making for them.
"We need a structure that is started by creators, for creators, but enabled by the government so that even as we are having these conversations, it is a two-way traffic. It is not, 'I am telling you this is what we are going to do.' It needs to be, 'If you are going to spend this kind of money on creators, here is how we feel it should be done," said Seb.
Content creators have also been asking for the reduction of costs involved in making content to be reduced, from the cost of data to the costs of equipment.
Speaking at the State House event, Youtuber Susan Wahome who runs the YouTube channel Suzy's Homestead, said that the government could help creators in the process of creation, distribution and representation.
"All any creator needs to get started is a smart device. We would very much appreciate policies that would make these devices accessible and affordable to us as creators. Give us the ability to upload and distribute our amazing African content by making internet affordable and accessible to creators," said Wahome.
She added that with the ever-evolving creator economy, there is a need for the government to stay updated by providing a platform where the government and creators could interact regularly.