NAIROBI, June 14 (Xinhua) -- Having realized the potential of the internet in alleviating job crisis in Kenya, the government on Thursday unveiled tax measures that seek to spur the growth of online jobs and businesses.
Treasury Cabinet secretary Henry Rotich, in his budget proposals, said Kenyan youth engaged in freelance online work and those doing their businesses on the internet, for instance, selling clothes or artistic works will only pay a fixed registration fee of 100 dollars per year.
The move exempts the youths from an income tax of 30 percent on their total earnings as it has been the case over the years.
The government expects the move will spur creation of up to a million freelance online jobs every year.
Rotich said the government through the Ministry of Information, Communications and Technology, has set up a program known as "Ajira Digital" whose aim is to bridge the gap between skills available and skills demand.
"A major objective of the program is to enable over a million youths annually to be engaged as digital freelance workers," he noted.
"To provide stability for the youth engaged in this program, the government proposes that the youth pay a registration fee of 100 dollars for the next three years in lieu of income tax," added Rotich.
Only youths who are registered with the program will benefit from the tax incentive, with the money going to Ajira Fund, which will fund youth initiatives.
"In this regard, a framework for the registration of the Ajira members, the modalities of collecting the fee as well as the structure for the utilization of the Fund will be put in place. This Fund will promote growth of local business that generate digital and digitally-enabled jobs," he said.
Several Kenyan youths who depend on online jobs have lauded the move, with Moses Ochieng, who does freelance writing for international websites, noting that the move would ease the challenges they have when filing tax returns.
"I will definitely register so that I only pay for the 100 dollars a year and be tax compliant. This will enable me even bid for local jobs, some that require tax compliant certificates," he said.
Bernard Mwaso of Edell IT Solutions in Nairobi said the tax measure is an acknowledgement by the government of the role of the internet in job creation.
"This is coming at the right time when internet use in Kenya is at its peak. The youth need such incentives to grow because income from online engagements can be irregular," he said.
He added that the move would also help the country know how many youths are doing freelance online jobs since the data is currently unavailable.
According to the Communication Authority of Kenya, the country has over 46 million internet users, a majority of whom access the service via smart phones.