Facebook Introduces VAT in Kenya

Facebook has introduced taxes in Kenya effective April 1, 2021. The value-added tax (VAT) will be applicable to advertisers whose ‘Sold To’ country on their business or personal address is set to Kenya and who haven’t confirmed that they are advertising for business purposes.

“Due to implementation of a value-added tax (VAT) in Kenya, Facebook is required to charge VAT on the sale of ads to advertisers that are not advertising for business purposes in Kenya,” Facebook explained in a statement. “All advertisers with a business country of Kenya who has not confirmed they are advertising for business purposes will be charged an additional 16% VAT on advertising services purchased after 1 April 2021.”

Not every Facebook account holder would be liable to a tax deduction but only those who meet the criteria.

Last year, Kenya Revenue Authority (KRA) introduced the Finance Act 2020 Digital Service Taxes (DST) on income from services provided through the digital marketplace in Kenya and will be applied at 1.5 percent on the gross transaction value (exclusive of VAT). Taxing digital market suppliers in the country became effective on January 2, this year, a move that will see the Kenya Revenue Authority (KRA) widen its revenue bracket.

Facebook now joins YouTube to deduct taxes for the US government from all channels, even those owned by creators who don’t reside in the United States of America.

By Fatiha Shabir