Digital content creators have called for an immediate suspension of the five per cent withholding tax on income earned through digital content monetisation, arguing that its enforcement has been rolled out without adequate consultation.
Through the Digital Content Creators Association of Kenya (DCCAK), the creatives want the Kenya Revenue Authority (KRA), National Treasury and digital platforms to stop enforcing the tax until the government meaningfully engages creators and their representatives on how it should be administered.
They argue that enforcement of the tax would unfairly burden creators.
The demand comes after Google notified Kenyan YouTube creators to submit and verify their KRA Personal Identification Numbers (PINs) by October 1, 2026.
Creators who fail to comply have been warned that their payments could be withheld.
DCCAK says the notice has exposed a wider problem with how the tax measure is being implemented.
“This is not implementation; it is an ambush,” the association said in a statement, arguing that creators have been given only weeks to comply with an obligation that has existed in law since 2023.
How the 5 per cent tax came about
The withholding tax on digital content creators was reduced from 15 per cent to 5 per cent through the Finance Bill, 2023, as part of measures intended to broaden the tax base.
At the time, the reduction was presented as a concession to a sector that had strongly opposed the higher rate.
While tabling the Finance and Planning Committee’s report on the Finance Bill on June 13, 2023, committee chair Kimani Kuria described the reduction as a win for digital content creators.
Kuria said the tax had been among the most contentious proposals in the Bill, with the committee concluding that it would be unfair to subject digital content creators to a higher withholding tax rate than other professionals.
He pointed to professional, legal, accounting and management fees, which attract a 5 per cent withholding tax.
“And that is why we said we are going to treat digital content creators just like all the other professionals at one standard rate withholding tax of five per cent,” Kuria said.
The sector is now challenging not necessarily the 5 per cent rate itself, but the abrupt enforcement of the tax.
DCCAK says the government should suspend enforcement and engage creators before proceeding with implementation.
The other of the association’s main concerns is that the five per cent withholding tax is calculated on gross earnings.
This means the deduction is made before creators account for the expenses incurred to produce the content from which the income is generated.
DCCAK says those costs can include internet data, cameras and other equipment, editing, studio hire and payments to people involved in production.
For established creators with relatively high and predictable incomes, the association argues that the deduction may be easier to absorb.
But for small and emerging creators whose earnings are modest and irregular, even a five per cent deduction from gross revenue can have a substantial effect on what remains after production expenses are paid.
DCCAK wants the taxation framework to recognise those production costs, particularly for smaller creators operating on thin margins.
Another bone of contention is that the five per cent deduction is withholding tax that serves as an advance credit against annual income tax liability rather than a final tax.
The association says there is a lack of clarity about how that credit will be reflected on their KRA accounts, how it can be claimed and how long refunds will take where a creator’s annual witholding tax exceeds the tax ultimately due.
This has created concern among creators who could have money deducted from their earnings but remain uncertain about when and how they will benefit from the corresponding tax credit.
“Creators should not be expected to finance government revenue while waiting indefinitely for credits or refunds,” DCCAK said.
The association is consequently demanding clear guidance on how withholding tax credits will be recorded, how refunds will work and the timelines that will apply.
Fears over withheld payments
Another concern is the October 1 enforcement deadline communicated to YouTube creators.
DCCAK says the tax provision has been in existence since 2023 but creators are now being given a short period to meet verification requirements.
The association argues that administrative delays should not result in income that creators have already earned being withheld.
The creatives are seeking a defined grace period to allow creators to comply without risking the loss or suspension of payments.
The association also wants the October 1 deadline suspended while consultation and public education take place.
Creators’ concerns extend beyond the tax itself to the process through which the measure is being enforced.
DCCAK argues that creators and their representative organisations were not meaningfully involved in decisions concerning the design, administration and rollout of the enforcement process.
“This is the second time in three years that a tax measure affecting the creator economy has been imposed without giving the sector a meaningful voice,” the association said.
The demand is significant because the digital creator economy has developed rapidly, with many people relying on platforms such as YouTube and other digital services to generate income.
DCCAK says policy affecting the sector should therefore consider the welfare of people who depend on digital content as a livelihood.
Data protection concerns
The requirement for creators to submit and verify their KRA PINs to a third party has also raised questions over the handling of personal and financial information.
DCCAK says uncertainty remains over how information submitted to meet requirements for payment of revenue earned will be handled.
The data at the center of controversy includes KRA PINs, addresses, payment information and records of tax withheld.
The association wants transparency on how that information will be collected, protected and retained.
DCCAK is also demanding a published assessment of how the withholding tax will affect Kenya’s digital and creative economy.
Its argument is that the sector should not be viewed simply as another source of tax revenue without considering the economic activity it supports.
DCCAK says digital content creation has been driven largely by young people who have used online platforms to create employment and income opportunities for themselves.
“Government should be enabling this sector to grow; not treating its workers as an afterthought,” it said.
The association has stressed that it is not opposed to taxation or to creators contributing to government revenue, but they want their input considered.
“We oppose a system that excludes creators from decisions affecting their livelihoods, provides inadequate notice, disproportionately burdens small creators and leaves critical questions unaswered,” DCCAK said.
The association is consequently seeking seven measures: suspension of the October 1 enforcement deadline; formal engagement with creator representatives; clear guidance on tax credits and refunds; a review of taxation on gross revenue; a grace period against withholding of earned income; transparency on personal and financial data; and a published assessment of the tax’s impact on the digital and creative economy.