Africa has seen a significant increase in the number of countries charging value-added tax (VAT) or goods and services tax (GST) on digital services sold by foreign suppliers. According to a new survey by PwC, 32 out of 54 African countries now impose VAT or GST on these services, up from 21 in 2024.
The survey, titled VAT in Africa: Digital Services 2026, covers 28 countries in detail and tracks the rules on electronically supplied services, including streaming, cloud tools, online advertising, and marketplaces. Eleven countries have introduced relevant rules since 2024, including Algeria, Botswana, Chad, Republic of Congo, Liberia, Malawi, Mauritania, Mauritius, Rwanda, Togo, and Zanzibar.
Implementation of New Rules
Not all the new rules are in force yet. For example, Botswana’s non-resident suppliers began registering on June 1, 2026, but they must charge and remit VAT from October 1, 2026. Liberia is moving from a goods and services tax to a VAT, with full implementation expected from January 2027.
Namibia and Mozambique have draft legislation awaiting implementation dates. The rates and thresholds for VAT or GST on digital services vary widely across countries, with no harmonized framework in place.
Country-Specific Rules
For instance, Nigeria has a 7.5% rate on digital services, with a registration threshold of $25,000 in annual supplies, and covers both business-to-consumer (B2C) and business-to-business (B2B) transactions. South Africa has a 15% rate, with a registration threshold of R2.3 million, and excludes suppliers serving only VAT-registered vendors.
Kenya has a 16% rate, with no registration threshold, and covers both B2C and B2B transactions. Ghana has a 20% effective rate, which includes a 15% VAT plus a 2.5% health insurance levy and a 2.5% education fund levy, and covers both B2C and B2B transactions.
According to Job Kabochi, PwC Africa’s Indirect Tax Leader, “While African governments are increasingly focused on taxing digital services, there is no single approach across the continent.” This lack of harmonization makes compliance more complex for businesses selling into multiple markets.
Nigeria Remittance Deadline and Ghana Input VAT Restrictions
In Nigeria, non-resident digital suppliers act as VAT agents. They must remit collected VAT to the Nigeria Revenue Service by the 21st day of the following month.
Ghana does not allow non-resident suppliers to recover input VAT, and its tax authority is onboarding these suppliers onto an E-VAT system. Egypt requires foreign suppliers to use a mandatory API platform to verify an Egyptian business customer’s tax number. This verification determines whether the buyer accounts for VAT under the reverse charge mechanism. Tanzania’s mainland and Zanzibar operate under separate VAT legislation, prompting PwC to treat them as distinct entries in its analysis.
Compliance and Technology
PwC notes that businesses must build compliance processes that adapt to changing rules. The firm also highlights the growing use of technology by tax authorities, including electronic registration, e-invoicing, and digital reporting tools.
Matthew Besanko, PwC Africa‘s Southern Africa Indirect Leader, said that businesses’ priority is managing digital economy tax and compliance requirements as an interconnected whole. The rules on digital services are particularly relevant for markets that the firm has identified as growth areas, such as Kenya and Nigeria.
These countries are forecast to experience significant growth in internet advertising and streaming video, respectively, and both apply VAT to digital services sold from abroad. As a result, subscription platforms, software vendors, and marketplaces must deal with the increasingly complex environment of digital services taxation in Africa.
