Tech giant Apple has announced plans to implement changes to its pricing and in-app purchases made through the App Store starting July 25, 2023. The adjustments will primarily impact app developers and users in three key African markets: Nigeria, Egypt, and Tanzania.
While Apple did not explicitly state whether the changes would result in higher or lower prices, the company cited the implementation of Value Added Tax (VAT) and tax increases in the affected countries as the primary reasons behind these modifications, indicating a likelihood of price hikes.
According to Apple, the pricing updates are in response to recent shifts in tax laws and currency exchange rates within the targeted nations. For instance, Tanzania has introduced an 18% VAT along with a 2% digital tax, while Egypt has implemented a 14% VAT.
In Nigeria, the 2021 Finance Act mandates that offshore companies offering digital services, including apps, high-frequency trading, electronic data storage, and internet advertising, must pay a 6% tax on their revenue when catering to local clients.
Apple clarified that if Egypt, Nigeria, or Tanzania is selected as the base storefront for an app or in-app purchase (excluding auto-renewable subscriptions), the prices will remain unchanged on that specific storefront. However, prices on other storefronts will be adjusted to maintain parity with the chosen base price.
Furthermore, the Pricing and Availability section of My Apps in App Store Connect has been updated to reflect the forthcoming price changes. Developers retain the flexibility to modify the costs of their apps, in-app purchases, and auto-renewing subscriptions as needed.
As Apple’s pricing adjustments go into effect, both developers and users in these African markets will need to adapt to the evolving landscape of in-app purchases and consider the potential financial implications of these modifications.