Google will apply a 16 percent value added tax (VAT) on all taxable goods and services in Kenya, on the platform. The tech-firm announced it will start to collect taxes on behalf of the National Government from February 1 2023, increasing cost products and services costs.
This comes after the Government introduced VAT (Digital Marketplace Supply) (Amendment) Regulation 2022. “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.
The American-based company will also collect tax information in compliance with local laws. “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. “We recommend providing your PIN number as soon as possible to ensure our invoice includes this information.”
It comes at a time when other multinationals have informed their customers of the impending VAT tax application. They include Netflix, Spotify as well as e-books and video-conferencing companies.
“In addition to this, to comply with local laws, we are required to collect your tax information. Please update your Kenya PIN number in your Google payments profile. Once updated, you should start seeing the PIN in your Google invoices. We recommend providing your pin number as soon as possible to ensure our invoice includes this transformation. Failure to provide your PIN by February 1, 2023, may cause issues with the invoice validity and possible implications for recovery of VAT costs if you are entitled to reclaim,” Google wrote to its Kenyan users.
Kenya Revenue Authority (KRA) said it is keen on the digital economy as it puts in place measures to tap more revenues and meet its financial year obligations. This is as the country, moves to adopt a “Digital Economy Blueprint,” a framework to improve its ability to leapfrog economic growth.
President William Ruto wants the Kenya Revenue Authority (KRA) to double its collections from Sh2.1 trillion to over Sh4 trillion ($32.338 million). Ruto explained that increasing revenue collection would aid the country in getting out of its debt situation.
