Africa-Press – Kenya. Kenyans operating businesses based on social media and online, as well as social media content creators, will soon be forced to pay a 15 per cent tax in a new raft of proposals.
A draft proposal published in one of the local dailies by National Assembly Clerk Samuel Njoroge reveals key tax amendment laws from the National Treasury aimed at boosting social media and phone usage while addressing the cost of communication services.
The Tax Laws (Amendment) Bill, 2024, sponsored by the Leader of Majority Kimani Ichung’wah, imposes a 15 per cent in exercise duty fees charged on social media and internet services.
Should the proposal sail through Parliament, a 15 per cent tax would be added to the cost of any fees that are charged to users for accessing the internet or social media services.
Under the new proposal, telecommunication companies that provide internet services will likely see increased operational costs. These companies may pass on the tax to consumers, leading to higher data and internet bundle prices, which could hinder accessibility and affordability for many users. Internet service providers, serving both residential and businesses, might also raise subscription rates to offset the added expense.
Digital advertising and e-commerce sectors may also face significant impacts. As social media platforms potentially increase advertising fees to accommodate the tax, digital marketing firms, advertisers, and online retailers will bear the brunt of these costs. SMEs, freelancers, and influencers who depend on social media for client engagement, brand visibility, and sales could see their reach reduced due to higher advertising costs.
Also in the Bill is the proposal to reduce the amount of exercise duty charged on telephone and data services from the current 15 to 12 per cent.
Should this be passed by the lawmakers, then the cost of mobile usage services could slightly come down and enable Kenyans to access related costs at affordable prices.
In the Finance Act 2023, the government gave the okay to reduce the amount of exercise duty charged on telephone and internet usage services, reducing the duty from 20 to 15 per cent. A further reduction of 3 per cent would mean that the costs could fall.
The Bill would further enable voice calls, messaging, and internet access to come down even as Kenyans continues to be on the receiving end of high rates for the services.
The government has already been under pressure to reduce some of the costs incurred on mobile communication, with the East African Community (EAC) Technical Committee on Communications making recommendations in October this year to settle on capping data roaming charges at 65 cents per megabyte.
Roaming refers to the ability of a mobile phone user to use their device for calls, texts, and internet access when they are outside their home network’s coverage area. This typically happens when you travel to a different country and your mobile service provider allows you to connect to a local network in the destination country.
If the EAC’s proposal is approved will mean cheaper rates for Kenyans making phone calls back to Kenya while in neighbouring countries such as Uganda and Tanzania.
Already, parliament on Thursday published information calling for the submission of public views on the proposals and contents of the bills from the Treasury.
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