Apple has announced it will be implementing price adjustments for in-app purchases on the App Store starting from July 25, 2023.
The price adjustments will affect app developers and users in 4 select markets covering Nigeria, Egypt, Tanzania, and Turkey.
While Apple did not state whether it would be an upward or downward adjustment, it cited the introduction of Value Added Tax (VAT) and increase in taxes in the affected countries as the reasons for the adjustments, which indicate that the prices will be increased. According to the company, prices in the affected countries are being updated to reflect new developments in the areas of tax regulations and foreign exchange change.
Specifically, Apple said there has been an introduction of a 14% VAT in Egypt, while Tanzania had also introduced 18% VAT plus 2% digital tax. It added that Turkey had also increased its VAT rate from 18% to 20%.
Need for price update
Explaining the rationale for the price adjustments, Apple in a message to users and app developers stated:
- “The App Store’s commerce and payments system was built to empower you to conveniently set up and sell your products and services on a global scale in 44 currencies across 175 storefronts. When tax regulations or foreign exchange rates change, we sometimes need to update prices on the App Store in certain regions and/or adjust your proceeds.
- “These updates are done using publicly available exchange rate information from financial data providers to help ensure prices for apps and in‑app purchases stay equalized across all storefronts. On July 25, pricing for apps and in‑app purchases (excluding auto-renewable subscriptions) will be updated for the Egypt, Nigeria, Tanzania, and Türkiye storefronts.”
Impact of the update
Highlighting how the update will impact app owners’ pricing on the App Store, Apple said:
- “If you’ve selected Egypt, Nigeria, Tanzania, or Türkiye as the base storefront for your app or in-app purchase (excluding auto-renewable subscriptions), the price won’t change on that storefront. Prices on other storefronts will be updated to maintain equalization with your chosen base price.
- “If the base storefront for your app or in-app purchase (excluding auto-renewable subscriptions) isn’t Egypt, Nigeria, Tanzania, or Türkiye, prices will increase on Egypt, Nigeria, Tanzania, and Türkiye storefronts.
- “If your in-app purchase is an auto-renewable subscription or if you manually manage prices on storefronts instead of using the automated equalized prices, your prices won’t change.”
While Apple did not categorically state the change influencing the price adjustment for Nigeria, Nairametrics gathered that it may not be unconnected with the country’s recent introduction of Digital Service Tax.
The digital tax as stipulated in the 2021 Finance Act, mandates all offshore companies providing digital services to local customers in Nigeria to pay a 6% tax on their turnover. This covers apps, high-frequency trading, electronic data storage, and online advertising.
