Kenyans to start paying 16% VAT on Facebook ads from November 1
07-11-2022 07:06:00 | by: Nixon Kanali | hits: 2567 | Tags:

Meta, Facebook’s parent company has announced that all Facebook ads in Kenya will be subject to value-added tax (VAT) VAT beginning this November. 

The social media giant said this in a statement issued on Wednesday on their business help centre.

‘’Beginning November 2022, Meta ads in Kenya are subject to a value-added tax (VAT) at the applicable local tax rate. This applies to all advertisers whose ‘Sold To’ country on their business or personal address is set to Kenya.’’ the statement read.

Meta says VAT will be added whenever you’re charged for your ads regardless of whether you’re purchasing Meta ads for business or personal purposes. 

In Kenya, all traders with a turnover of taxable supplies of 5 Million per annum and above are required to register for VAT. Voluntary registration is however allowed for traders with taxable supplies below the 5 Million threshold. The tax is charged on the supply and importation of taxable goods or services made in the country. 

Because VAT is added on top of charges, Meta says you won’t reach your billing threshold faster, but you may be charged more than your billing threshold amount.  ‘’If you pay for Meta ads with a manual payment method, VAT is accounted for and applied at the applicable local rate when your ad account is funded to determine the total balance available,’’ it says.

In April this year, the Kenya Revenue Authority (KRA) revealed plans double the tax collected from tech giants operating or facilitating digital payments in the country.

Amazon, Google, Apple, Netflix, Twitter, Paypal and Facebook were among the companies that will be affected by the proposed tax raise from 1.5% to 3%. The treasury made this proposal through the Finance Bill 2022.