Social networking site Facebook is going to charge its users Value-Added Tax (VAT) starting 1st April 2021 on the sale of advertisements on its platform in Kenya starting 1st April 2021.
“This applies to advertisers whose ‘Sold To’ country on their business or personal address is set to Kenya and who haven’t confirmed that they’re advertising for business purposes,” Facebook announced on the VAT.
Similarly, Google said it will implement a 16% VAT Tax for Apps on Google Play and Android effective 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,” said Google.
Google will also use VAT-inclusive pricing in Kenya, which means that prices shown on Google Play will include all taxes, regardless of where your business is located. This change will apply to all paid apps and in-app purchases made by customers in Kenya.
This is in compliance with the Kenya government’s Income Tax (Digital Service Tax) Regulations 2020, which came into effect on the 2nd January 2021.
According to the Kenya Revenue Authority (KRA) Income Tax (Digital Service Tax) Regulations, 2020, the digital service tax shall be imposed on the gross transaction value of the service.
Kenya currently has a 1.5 per cent digital tax policy on the value of online transactions, as provided in its Finance Bill 2020.