THE government's decision to enhance taxation within the digital economy, encompassing digital content creation and digital asset transactions, has raised apprehension among young individuals who depend on these avenues for their livelihood.

In a country grappling with high levels of unemployment, numerous young individuals have turned to digital platforms to tap into their creative talents and skills, generating income in the process.

Nevertheless, the introduction of these new taxes has instigated concerns that this thriving sector may face suppression, potentially impacting the livelihoods of many young people.

Last Thursday, the Minister of Finance, Dr. Mwigulu Nchemba, unveiled the country's financial projections for the 2024/25 fiscal year during a parliamentary session in Dodoma.

The estimates, totaling 49.5tn/-, were eagerly anticipated by the public as they would illuminate the government's strategies for the forthcoming year.

Dr. Mwigulu emphasized a crucial aspect of the budget - its funding source. The anticipated tax revenue for the year stands at 29.4tn/-, marking a 10 percent surge from the previous fiscal cycle.

Moreover, the government aims to raise an additional 3.8tn/- from diverse sources. The escalation in tax revenue is anticipated through a range of strategies aimed at enhancing government earnings.

One strategy to bolster this revenue stream involves the more effective taxation of the digital economy, encompassing digital content creation and digital asset transactions.

During the parliamentary session, it was underscored that this move is geared towards capturing revenue from the flourishing digital domain, which has gained considerable significance in today's economy.

In the evolving landscape of content creation, creators have found success through sponsored content, digital campaigns, and ad revenue on platforms like YouTube, TikTok, and Facebook.

Notably, they often receive substantial payments from brands they endorse, a portion of which is now subject to taxation.

"As a freelance writer," shared Sarah John, a local content creator, "the digital economy has revolutionized my income opportunities. However, the government's decision to tax digital content creation raises concerns as it could potentially limit the prospects for young creators like myself."

She further expressed saying: "The digital realm has granted me a platform to showcase my creativity and engage with a global audience. I worry that these new taxes might impede my financial sustainability."

Sarah underlined that social media serves as her primary revenue source, enabling collaborations with brands and content monetization.

As a 28-year-old content creator, she perceives the government's action as a direct threat to her livelihood and that of other budding creators.

Hence, the sentiment conveyed was clear: "Policymakers must grasp the significance of the digital economy in creating opportunities, especially employment, for the youth and should foster its expansion rather than hinder it with taxes."

Undoubtedly, unemployment remains a pressing challenge in the country, with numerous graduates encountering difficulties in securing positions in both public and private sectors.

Statistics reveal that a considerable portion of Tanzanian graduates, face challenges in obtaining steady employment, with just a meager 10 percent being absorbed into formal employment opportunities.

Consequently, there is a surge in young individuals exploring alternative avenues for income generation, including delving into digital content creation.

Jamal Abdul, an online entrepreneur, emphasizes how the digital economy serves as a vital resource for numerous young entrepreneurs, providing them with a platform to initiate and scale up businesses.

"The Thursday decision by the government, has raised apprehensions regarding the sustainability of online businesses and its potential impact on the entrepreneurial landscape," he remarked.

Furthermore, he highlighted: "It is imperative for the government to foster an enabling environment for digital innovation and entrepreneurship rather than introducing obstacles through excessive taxation."

He stressed how the digital economy has empowered young individuals to display their talents, creativity, and entrepreneurial acumen.

"Platforms like social media, online marketplaces, and digital content creation have proven particularly advantageous for youths who may lack access to traditional job opportunities or formal education," he affirmed.

Expressing concern, he stated that young creators and entrepreneurs are now apprehensive about how their income sources may be affected.

Media reports indicate that neighboring Kenya, content creators, such as skit makers, digital artists, and TikTok influencers, are now mandated to pay a 1.5 percent tax on their social media earnings, as outlined in the country's latest Finance Act.

Despite facing notable resistance, the Kenyan government has enforced this new regulation.

In February of this year, content creators in Nigeria were initially alarmed when the Federal Inland Revenue Service (FIRS) labeled them as ‘major tax evaders.’

However, FIRS was quick to clarify that individual content creators would not be subject to taxation, as this falls under the jurisdiction of state governments. The agency emphasized that their primary focus is on companies that earn profits exceeding $16,638.

In Tanzania, the situation seems to mirror this trend, with high unemployment rates labeled as a potential ticking time bomb in the nation. As a result, many young people are turning to alternative sources of income, such as freelancing, digital content creation, and online entrepreneurship.

Specifically, digital content creation has become a crucial resource for numerous young individuals, enabling them to exhibit their talents, establish a personal brand, and earn income through various online platforms.

Ranging from graphic designers to content creators to social media influencers, the digital economy has empowered young people to harness their creativity and entrepreneurial zeal in order to make a living.

Therefore, the government's resolution could potentially jeopardize these prospects for young individuals, rendering it more difficult for them to sustain themselves and their families.

"Given the limited traditional employment opportunities and the expanding youth demographic, it is imperative for the government to foster and uphold the digital economy to address unemployment challenges and stimulate economic growth," remarked Anna Joseph, a medical professional.

To combat the unemployment crisis, policymakers must acknowledge the pivotal role of the digital economy in offering young individuals opportunities to flourish and prosper.

Emphasizing the importance of fostering growth in this sector, Dr. Anna suggested, "Rather than enforcing restricting tax measures, the government should concentrate on fostering a conducive environment for digital entrepreneurship and innovation."

She strongly believes that investments in digital infrastructure, technological education, and entrepreneurship support initiatives can empower young people to tap into the potential of the digital economy and establish sustainable livelihoods.

"By empowering the youth to utilize their skills and talents in the digital realm, Tanzania can unleash the potential of its young demographic and propel economic development in the digital era," she highlighted.