In an announcement that has stirred conversations among Kenyan Facebook content creators, Meta has revealed that starting January 1, 2025, Kenyan Facebook users will be subject to a 5% withholding tax on their creator payouts. This update, communicated to creators directly through a message on November 20, 2025, marks a significant change in how taxes will be processed for creators earning through Meta Platforms Ireland Limited.
What Does the 5% Withholding Tax Mean for Kenyan Creators?
Meta’s notification to content creators outlines that starting December 2025, Meta will begin deducting the 5% tax from all creator payouts before remitting the net amount to the content creators. This new tax measure is in line with Kenya’s tax laws, which mandate that all businesses, including Meta, deduct taxes from payments made to creators located in Kenya.
The Kenya Revenue Authority (KRA) will be the authority responsible for collecting the tax, and the deduction will be reflected on creators’ remittance advice. Tax deduction certificates will also be available through the KRA portal for easy reference.
Key Changes to Be Aware Of:
- Tax Deduction: A 5% withholding tax will be deducted from all payouts.
- Payout Process: Despite the new tax, the payout process remains unchanged, with funds being deposited into the creators’ bank accounts.
- Tax Documentation: Tax deduction certificates will be available for creators through KRA’s online portal.
What Should Content Creators Do?
To ensure smooth implementation of the new tax rules, Meta has advised all Kenyan creators to update their business and tax details on the Payouts Page. The following information should be updated:
- Registered Business Name
- Registered Address
- Tax Identification Number (TIN)
These updates will ensure that Meta processes the correct tax amounts and that creators comply with the KRA’s tax regulations. Creators must ensure their details are accurate to avoid delays in the payment process.
Creators’ Reactions to the New Tax Rule
The new tax initiative has sparked mixed reactions from Kenyan creators. Some have expressed frustration, while others have made light of the situation. Hassan Mwana wa Ali, a radio presenter and sports journalist, humorously lamented the tax burden, saying, “Maskini! Ushuruuuuuu!!!!”
Another content creator, Malala Luttah, made light of the situation, saying, “The government asked content creators to pay tax, but they declined to remit. Now they’ve reached out to Meta, and Meta is doing the job for them! They will now withhold 5% and remit to KRA! But what about us low-income earners? I blame those who share the millions they earn from Meta!”
The Legal Background: Why Is This Happening?
The introduction of taxation on content creators in Kenya began with the Finance Bill 2023. This bill introduced a 5% withholding tax for resident digital content creators and a 20% withholding tax for non-residents. The aim was to regulate and ensure that creators contribute to the country’s tax system in line with global digital monetization trends.
Key Details of the Finance Act 2023:
- 5% Tax for Residents: Resident creators will be taxed at a 5% withholding tax.
- 20% Tax for Non-Residents: Non-residents face a higher 20% withholding tax.
- Expansion in 2024: The Finance Bill 2024 further clarified and expanded the scope of these taxes, applying to creative works and digital content that are not exempt from tax.
The Kenya Revenue Authority (KRA) has already begun implementing the Digital Services Tax (DST) and is continuously refining the regulations to ensure digital content creators comply with these new guidelines.
Impact on Creators and the Industry
The 5% withholding tax may be seen as an added burden for Kenyan content creators who rely on their social media platforms for income. However, the KRA has emphasized the importance of digital content in the economy and has worked to make the tax collection process as transparent as possible.
The deduction will ensure that content creators pay their fair share of taxes, thereby contributing to Kenya’s economy. The KRA’s continued efforts to regulate digital monetization in Kenya are aligned with global tax trends and the growth of digital economies.
Conclusion
Kenyan Facebook content creators should brace for the 5% withholding tax that will start in 2025. While it introduces an additional financial responsibility for creators, the KRA’s actions are part of a broader effort to ensure fairness and accountability in Kenya’s digital economy.
Creators should update their business and tax details on Meta’s Payouts Page and stay informed about the changes in tax laws. Despite the controversy surrounding the new rules, the government’s push for digital tax compliance is aimed at aligning with global standards and ensuring that content creators contribute to the nation’s development.
