Google has announced it will be implementing a 16 per cent tax charge on all taxable goods and services starting February 1, 2023.
According to a statement by the Tech firm, users are required to provide their Kenya Revenue Authority´s PIN number to ensure their invoices include that information.
¨Due to the new tax legislation in Kenya and to comply with the local laws, we are required to collect the information,¨ part of the statement read.
Kenyans on the platform have been urged to update their PIN number on their google payment profile.
Furthermore, a failure of users not proving the said information before the deadline will result in issues with invoice validity and possible implications for recovery of value-added tax (VAT) costs.
This comes after the Finance Act of 2022 - The value-added tax (Digital Marketplace Supply) amendments was signed into law last year.
The bill revised several tax laws to amend section 10 of the VAT Act of 2013 regarding the measures of electronic services, the internet and digital marketplace supply. (DMS)
The proposed change was to shift the liability to account for VAT transactions on digital marketplace supplies to the non-resident provider of the services. This is both for Business to Business (B2B) and Business Consumer (B2C) transactions.
Other services on the Digital Marketplace to be taxed include;
Downloadable digital content (mobile applications, e-books, films) Software programmes (drivers, website filters and firewalls) Over-the-top services (streaming television shows, music, podcasts) Subscription-based media (news, magazines, journals.)
Tickets for live events, theatres, and restaurants. Electronic data management (website hosting, online data warehouse, cloud storage services) Distance teaching through pre-recorded media or e-learning. etc
The introduction of the new tax is an effort by the government to increase its revenue. A target has been set by the President to the tax man to collect between Sh4 trillion and Sh5 trillion in the financial year ending June 2024.
Currently, Kenya Revenue Authority is collecting Sh2.1 trillion in revenue which is 14 per cent of the GDP.
