Google to Apply 16 Percent VAT Tax on Apps and In-App Purchases Effective April

Google playstore apps
(Photo Courtesy)

Google will start charging tax for apps and in-app purchases on Android’s Google play store. A 16 percent VAT tax will now be applied for the services in line with the digital services tax which took effect on January 1, 2021.

The Kenya Revenue Authority sent out emails notifying users of the tax which will take effect on April 8.

“Google is now responsible for determining, charging, and remitting 16% VAT for Google Play Store paid apps and in-app purchases made in Kenya. This will be effective as from April 8, 2021. Even if you’re not in Kenya, this change in tax laws will still apply for purchases by Kenya customers.

Read: KRA Seeks to Collect Sh5 Billion in Digital Taxes within Six Months

KRA says they will send the applicable taxes to the relevant parties with plans to include the amount in the pricing of the apps and in-app purchases. This means users do not need to calculate the taxes, but instead, gear up for higher prices inclusive of the 16 percent VAT tax.

The change will affect all apps and in-app purchases made by customers in Kenya, irrespective of the country where the business is located.

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Written by Vanessa Murrey

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