Starting February 2023, Google will charge 16% VAT on ads in Kenya

Johnstone Kpilaakaa -

The Kenyan government through the value-added tax (VAT), and digital marketplace supply (amendment) regulations of 2022 has required global technology companies including Google to charge Kenyan users a 16% VAT on their services.

Starting February 1, 2023, Google has announced that it will introduce a 16% VAT on its ads services to enable its tax collection efforts on behalf of the Kenyan government.

"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.

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In Nigeria: Recall that in April 2022, Google imposed a 7.5% VAT on its services in Nigeria, in compliance with the Finance Bill 2021 that required non-resident tech firms like Twitter, Meta, Google, and Netflix to tax users. Facebook's parent company, Meta also implemented the directive in February 2021. 

How to update tax information on Google

To avoid issues with invoice validity and possible implications for recovery of VAT costs, Kenyan users can use the following process to update their tax information on Google.

  • Sign in to your Google Admin console.
  • In the Admin console, go to Menu > Billing > Payment accounts.
  • Next to your subscription, click More > View payment settings.
  • Scroll down to Kenya tax info and click Edit.
  • If you're an individual business owner with a taxpayer ID, select the Individual Entrepreneur tax status before entering your taxpayer ID.
  • Add or change your tax information or tax status.
  • Click Save.