One of the proposals in the Bill is the taxation of payments made to digital creators.
Content creation has grown over the years, and creators earn a living through sponsored content, digital campaigns, or ad revenue from platforms such as YouTube, Tiktok and Facebook.Under the current taxation regime defined by the Income Tax Act (ITA), certain digital payments made are subject to withholding tax, while others may not fall under the provisions of the ITA.
Payments made by taxpayers to digital content creators will be subject to a 15 withholding tax rate, according to the new proposed legislation.
At the same time, the definition of digital content monetization has been expanded to include various types of content and services.
The amendment also proposes affiliate marketing to remit the new tax, where a content creator earns a commission whenever the audience of the creator clicks on the product displayed.
The government further wants to tax subscription services where the audience pays a periodic fee to access the content and support content creators.
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