Despite the heated public controversy over the 1.5 percent electronic transfer levy (e-levy) that the government is aiming to impose on individuals, the Ghana Revenue Authority (GRA) has quietly slipped eCommerce levies on Ghanaians via the Google Play Store.
Customers in Ghana and Nigeria who purchase applications or make in-app purchases will pay taxes, including VAT, beginning April 1, 2022, according to a letter sent to all app developers on Google Play Store.
“In Morocco, beginning March 21, 2022, and Ghana and Nigeria, effective April 1, 2022, Google will begin adopting tax-inclusive pricing, which means that prices published on Google Play will include all taxes (including VAT), regardless of where your business is based,” it stated.
The move would affect all paid apps and in-app purchases made by users in Ghana, Morocco, and Nigeria, according to the letter.
It then recommended app developers who wanted to change the prices of their things to do so in their Play Console’s pricing and distribution, In-app products, and Subscriptions pages.
Although the eCommerce tax rate for Ghana is yet unknown, Google will collect 7.5 percent VAT on behalf of the appropriate state government in Nigeria, as well as extra 7.5 percent VAT on the service fee imposed on transactions made by clients worldwide.
Techgh24 previously learned from eCommerce sector players that the idea of levying an eCommerce tax in Ghana was discussed long before the term “E-levy” was coined. However, the administration was unmotivated to focus on the eCommerce tax, apparently because the expected revenue was insignificant.
However, it appears that, as the government faces the most vehement opposition to the e-implementation, levy’s it has turned to the low-hanging fruit, the eCommerce tax, in order to bring in whatever income is needed to keep the economy afloat.
As of now, every app downloaded in Ghana on the Google Play Store, as well as any in-app transaction such as the purchase of games, software, or other items, would be subject to the eCommerce tax. Free apps, on the other hand, will continue to be tax-free.
Amazon has had an eCommerce tax in place for Ghana for some time, and Netflix is poised to follow suit.
Cambodia and Georgia are two countries that share a border.
Meanwhile, the Google letter added that beginning April 1, 2022, the internet giant will collect 10% VAT on behalf of Cambodian tax officials, claiming that app developers no longer have control over VAT collection in the country.
It further stated that “starting on April 1, 2022, Google would be responsible for assessing, charging, and remitting 18 percent VAT to the proper authority for all Google Play Store paid app and in-app purchases made by users.”
Visit the Google Play Console Help Center for additional information on tax rates. Please visit your tax professional if you have any additional queries.