EXPLAINER: What next for creators after Meta rolls out 5% withholding tax?

Creators affected by the new withholding tax are advised to take several proactive steps to prepare.
On the positive side, creators will have clear documentation of their expenses, making it easier to negotiate with brands for better pay.

On November 20, Meta alerted Kenyan content creators that beginning January 1, 2026, a 5 per cent withholding tax will be deducted from all their payouts.

The change is a response to Kenyan tax law requiring businesses to deduct and remit tax to the Kenya Revenue Authority (KRA) on payments made to locally based creators.

In a communication to creators, the company said Kenya’s tax regulations now require all businesses to deduct and remit withholding tax to the KRA for payments made to creators based in the country.

“Starting Jan 1, 2025, Kenya tax law requires all businesses to deduct and remit taxes to the Kenya Revenue Authority (KRA) for any payments made to creators located in Kenya,” the notice stated.

“As a result, Meta will deduct 5 per cent withholding tax from all payments made to you, and the same would also be reflected in the remittance advice issued to you by Meta.”

The company further explained that the withheld amounts will be visible in monthly statements, with creators receiving only the net payment after tax.

This move is part of a broader government effort to widen the tax base in Kenya’s booming digital economy, where content creation, influencer marketing and digital advertising continue to grow rapidly.

For Kenyan creators monetising through Meta — including on Facebook, Instagram and Reels — this change will have a direct financial impact.

The five per cent withholding tax will be applied at source, meaning creators will receive less than before since Meta remits part of their earnings directly to KRA.

Creators will also need to account for these deductions when filing their annual tax returns.

They have been urged to ensure their Tax Identification Number (TIN), business name and registered address are correctly captured on their payouts page, so the withheld amounts are properly documented.

On a larger scale, this aligns Meta with the Finance Act 2023, which introduced withholding tax on “digital content monetisation” at a rate of five per cent for resident creators and 20 per cent for non-residents.

Withholding tax is a mandatory levy that requires businesses or organisations making certain payments to deduct a specified percentage at the source and remit it directly to the KRA on behalf of the recipient.

Under Kenyan law, the tax is applied to a range of income categories — including professional fees, interest, dividends, royalties and, more recently, payments made to digital creators.

The Act defines digital content monetisation as an "offering for payment entertainment, social, literary, artistic, educational, or any other material electronically through any medium or channel."

Before this change, Kenya’s Finance Bill had proposed a 15 per cent withholding tax on creators. But after pushback, lawmakers lowered it to five per cent during parliamentary review.

This reduction made the tax more manageable for many creators, but the impact on income remains real.

The creators have largely been silent on the latest development, signaling acceptance of the new tax measure, even as the tax could place a strain on their cash flow.

Many rely on these earnings to cover production costs — equipment, editing, transport — and the cut eats into their margins.

For creators just breaking into monetisation, the reduced take-home pay may slow growth or force them to rethink their content strategies.

Creators should ensure all their tax and business details are up to date on Meta’s platform, and they must be more disciplined about tracking their monthly remittances.

Errors or missing information could complicate year-end tax filing or delay receipt of tax certificates.

With withheld amounts being officially recorded and certified, creators will have clear documentation of their earnings and taxes paid, potentially making it easier to demonstrate income for financial services, business purposes, or even when negotiating brand deals.

Furthermore, this is part of a larger trend: Kenya is increasingly formalising its digital economy.

By broadening the tax net to include digital creators, the government is both generating new revenue and acknowledging the importance of the creator economy.

Creators affected by the new withholding tax are advised to take several proactive steps to prepare.

They should update their Meta payout details, ensuring that their TIN, business name, and address are accurate so that withholding and documentation are correct.

It is important to track monthly remittance statements, confirming that withheld amounts match Meta’s reports and saving tax deduction certificates once available.

Creators should also budget for reduced earnings, particularly those who reinvest heavily in content production.

Consulting a tax professional can help clarify overall tax liability and optimise filings. Finally, staying informed on further policy developments is crucial, as this change forms part of a broader regulatory shift in Kenya’s digital economy.

For many creators, the challenge will be navigating tighter cash flows and adapting to compliance requirements.

The move also underscores the government's commitment to treat the creator economy as a source of revenue and growth.

Meta’s rollout of a 5 per cent withholding tax for Kenyan creators marks a critical inflection point for the country’s digital economy.

While it means less in creators’ pockets each month, it also brings digital content earnings into the formal tax system, improving transparency and accountability.