The implications of Kenya’s most recent Finance Act, which levies a 1.5% tax on earnings from social media platforms, are causing concern for content creators in that nation.
The Kenyan government upheld the Act in the face of strong opposition, subjecting TikTokers, digital creators, and skit makers to the new tax system. Similar tax fears briefly alarmed content creators in Nigeria, where the Federal Inland Revenue Service (FIRS) declared its intention to pursue them as major tax evaders. But things quickly turned around, with the FIRS making it clear that individual content creators are not under their authority.
Although the exemption from direct FIRS taxation may bring relief to individual content creators, Nigeria’s tax system is undergoing substantial transformation.
Leading the charge to modernize tax administration is the FIRS, which is emphasizing the use of technology to improve the taxpayer experience.
The Executive Chairman of the FIRS, Zacch Adedeji, highlights the significance of streamlining tax procedures using creative methods.
Amidst these developments, Nigeria is also embarking on broader tax reform initiatives. President Tinubu’s appointment of Taiwo Oyedele, a seasoned tax expert, to lead a tax reform group underscores the country’s commitment to achieving a minimum 18% Tax to GDP ratio within three years.
This ambitious goal reflects Nigeria’s determination to strengthen its tax framework and enhance revenue generation while navigating the evolving digital economy landscape.