Facebook to Charge 7.5% VAT from January on Ads

Starting from January 2022, businesses and individuals are to mandatorily pay 7.5 percent for Facebook Ads as Value Added Tax (VAT).

This development came as the Federal Government shifts its attention to the various social media platforms for more revenue.

Announcing this development in a statement released yesterday, Facebook said the tax will apply to those buying ads for either business or personal purposes.

The statement read: “Due to implementation of a value-added tax (VAT) in Nigeria, Facebook is required to charge VAT on the sale of ads to advertisers, regardless of whether you’re buying ads for business or personal purposes. “All advertisers with a business country of Nigeria will be charged an additional 7.5 per cent VAT on advertising services purchased beginning January 1, 2022.

If you’re registered for VAT and provide your VAT ID, your VAT ID will show up on your ads receipts,” the company stated. Facebook also stated that the categories of entities exempted from VAT would be able to recover the fund if they provided their tax ID.

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“In the event that you’re entitled to recover the VAT, this may help you recover any VAT you paid to the Nigerian tax authorities if you are a VAT registered business in Nigeria,” the statement read.

The move has been described by business and tax experts as a means by the Federal Government to increase government revenue and widen the country’s tax net.

To strengthen this new drive, the country’s telecoms regulator, Nigerian Communications Commisson (NCC), had also announced plans to bring the social media platforms otherwise referred to as Over The Top (OTT) services under its regulation.

The NCC said it was working on a framework known as Digital Services Providers (DSP) regulation that would address several issues and complaints being raised by Mobile Network Operators over the activities of the platforms.