Starting April 2021, Facebook Inc,. will start applying 16pc VAT tax on ad payments in Kenya. 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.”
Facebook also advised users to go to Accounts Manager or Ads manager to check the box whether or not they are advertising for business purposes.
Kenyans 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 16pc, advertisers should also expect higher charges.
The move comes after KRA’s implementation of the digital tax which commenced on January 1st, 2021. Google has also announced plans to implement the taxes on apps and in-app purchases effective April 8th.