As the new month begins, individuals and businesses running ads on Meta (formerly Facebook) platforms in Kenya should expect tough times ahead. The social media giant has informed those running ads on its platform that it will be implementing the 16% Value Added Tax (VAT).
With this, you should expect to pay 16% more on top of what you will be paying to run ads on the platform. If you typically spend Ksh 10,000 per month on ads, you may end up paying about ksh 11,600 starting from this month. As expected, META will not be pocketing the extra amount that you pay but it will rather be the Government’s cut.
In a notice to advertisers, Meta said, “Due to updates to value-added tax (VAT) laws in Kenya, Meta 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 Kenya will be charged an additional 16% VAT on advertising services purchased beginning 1 November 2022. “
The company also clarified that, “Because VAT is added on top of charges, you won’t reach your billing threshold faster, but you may be charged more than your billing threshold amount.” This is what those with a tight budget do not want to hear.
Higher advertising rates might mean that businesses pass the extra cost to their customers and this might lead to rising costs for the products or services sold.
Meta further states,” If you’re registered for VAT and provide your VAT ID, your VAT ID will show up on your ads receipts. In the event that you’re entitled to recover VAT, this may help you recover any VAT you paid to the Kenyan tax authorities if you are a VAT registered business in Kenya.”
You can add your VAT ID by going to your Facebook ad account, navigate to Payment Settings section
