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Facebook to Apply 16 Percent VAT Tax on Ads Effective April

[IMAGE/ COURTESY]

 

Facebook will start applying 16 percent VAT tax on ad payments in Kenya from April 1,2021. The social media company announced the latest development on its business page, saying the taxes would be applied to any advertiser who has Kenya as their address or target market.

“Beginning 1 April 2021, Facebook ads in Kenya are subject to a value added tax (VAT) at the applicable local tax rate. This applies to advertisers whose ‘Sold To’ country on their business or personal address is set to Kenya and who haven’t confirmed that they’re advertising for business purposes.”

In its post, Facebook advised users to go to Accounts Manager or Ads manager to check the box whether or not they are advertising for business purposes.

Read: Here is the List of Services that Will Attract the 1.5 Percent Digital Tax

People who advertise for business will be responsible for their own self-assessment and Vat Tax payment in accordance with the Kenya Revenue Authority (KRA) and will not have the VAT added to their ads purchases. The tax will only apply to users who are advertising for other reasons. If a business fails to confirm, the tax will be applied.

Facebook said that due to the addition of the 16 percent tax, advertisers should expect to be charged a little more than usual.

The move is in line with KRA’s implementation of the digital tax which commenced on January 1 this year. Google has also announced plans to implement the taxes on apps and in-app purchases effective April 8.

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Written by Vanessa Murrey

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