Google is set to introduce a 16% Value Added Tax (VAT) on some of its goods and services sold in Kenya from February 1, 2023.
This is following the introduction of a new levy by the Kenyan government through the Digital Marketplace Supply (Amendment) Regulation, 2022.
Other international tech companies including Spotify and Netflix have also indicated that they will include the levy in their products and services beginning next month.
The levy will automatically raise the cost of these products and services, as the companies seek to collect revenue on behalf of the Kenyan government.
To help comply with the new regulation, Google has already asked its customers to submit tax information which includes their KRA PIN.
“Due to new tax legislation in Kenya, starting February 1, 2023, Google will be required to charge a 16% tax on all taxable goods and services,” Google said in a statement.
“Please update your Kenya PIN number in your Google payments profile. Once updated, you should start seeing the PIN number on your Google invoices,” it added.
Meta, Facebook’s parent company announced in November last year that all Facebook ads in Kenya will be subjected to value-added tax (VAT).
The Act makes it clear that the annual turnover threshold of KES 5 million for VAT registration will not apply to companies that sell digital services or supplies that are brought in from other countries. This means that all digital suppliers, no matter how much money they make each year, will have to sign up for VAT and report it.
