Ghana Revenue Authority (GRA) has quietly sneaked eCommerce taxes on Ghanaians via the Google Play Store amid the heated public debate about the 1.5% electronic transfer levy (e-levy) government is seeking to slap on citizens.
In a letter to all app developers on Google Play Store, the tech giant stated that beginning from April 1, 2022, customers in Ghana and Nigeria who purchase apps or do in-app purchases will pay taxes, including VAT.
“Google will begin using tax-inclusive pricing in Morocco, effective on March 21, 2022 and Ghana and Nigeria, effective on April 1, 2022, which means that prices shown on Google Play will include all taxes (including VAT), regardless of where your business is located,” it said.
According to the letter, the change will apply to all paid apps and in-app purchases made by customers in Ghana, Morocco and Nigeria.
It is still not very clear what the eCommerce tax rate will be for Ghana, but in Nigeria, Google will be collecting 7.5% VAT on behalf the appropriate state authority, plus another 7.5% VAT on the service fee charged on purchases made by customers globally.
Techgh24 earlier learnt from eCommerce industry players that the idea to charge eCommerce tax in Ghana was mooted long before even E-levy became topical. But government did not feel motivated to focus on eCommerce tax, allegedly because the expected revenue was nothing to write home about.
But it would appear, that as government faces the stiffest opposition to the e-levy implementation, it has resorted to the low hanging fruit, which is the eCommerce tax in a bid to bring in the every little revenue needed to sustain the challenged economy.
As it stands now, any app purchased in Ghana on Google Play Store, and any in-app transaction like the purchase of games, software and others, will attract the eCommerce tax. But free apps will remain tax free.
Amazon has long implemented an eCommerce tax for Ghana and the next platform expected to do same will be Netflix.
Cambodia and Georgia
Meanwhile, the Google letter also stated the tech giant will be collecting 10% Value Added Tax (VAT) on behalf of tax authorities in Cambodia from April 1, 2022, saying that app developers no longer have control over VAT collection in that country.
It also said that in Georgia, “Google will be responsible for determining, charging, and remitting 18% VAT to the appropriate authority for all Google Play Store paid app and in-app purchases made by customers effective on April 1, 2022.”
For more information on tax rates, visit the Google Play Console Help Center. If you have any other questions, please consult your tax advisor.