Google to Implement 18% VAT on Digital Services

Google to Implement 18% VAT on Digital Services in Uganda Starting September 1, 2024

In compliance with new local regulations, Google has announced that it will begin charging a value-added tax (VAT) of 18% on all digital services in Uganda, effective September 1, 2024. This move aligns with the Ugandan government’s efforts to increase revenue from the growing digital economy.

The new VAT policy will affect a range of Google’s digital services, including Google Ads. However, Google has assured its customers that no action is required from their side concerning their Google Ads accounts. “You’ll see VAT charges on your Google Ads Billing pages and invoices for September and onwards,” stated the company in an email to its users.

While this change will impact the cost of digital advertising and other services provided by Google, the company has advised users to consult their tax advisers for any questions related to this tax update. “Google can’t advise you on tax matters. Please contact your tax adviser for any questions regarding this change,” the email further elaborated.

This development is part of a broader trend where governments worldwide are updating their tax policies to include digital services. Uganda’s decision to implement an 18% VAT is consistent with similar moves by other countries aiming to tap into the revenue potential of their digital sectors. Businesses utilizing Google’s services will need to adjust their budgets accordingly to accommodate this additional expense.

As the implementation date approaches, users are encouraged to review their invoices and billing statements to understand the financial impact of the new VAT charges.

It is important to note that it is not only Google that has been selling digital services in Uganda. Several other digital companies, including but not limited to Facebook, X, Instagram, Godaddy, Namecheap, Ahrefs, Moz, and Ubersuggest, among several other digital companies.