Starting from January 1, 2022 Nigerians will begin to pay 7.5 percent value-added tax (VAT) on all ads placements on Facebook, Facebook has said.
In a statement issued on Thursday, the social media giant disclosed that the new development will apply to those buying ads for businesses or personal purposes.
“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,” the statement read.
The statement continued, “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 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 company that recently changed its name to META also added that the same 7.5 percent VAT charge will apply to Instagram ads.
The decision may be connected to the Federal Government’s strategy to develop regulations for media outfits that have a significant presence in the country and work on modalities to tax them.
It will be recalled that some months back federal government had suspended Twitter after the microblogging platform took down a post of the President, Muhammad Buhari. In the series of negotiations and mediations that followed, the Presidency through the Minister of information stated that the federal government will work on measures to regulate the activities of all major social media outlets in the country.
In this light, the President has developed and transmitted the 2021 Finance Bill to parliament. The bill if passed into law will give the Federal Inland Revenue Service (FIRS) power to assess and charge companies income tax (CIT) on any digital company with a significant presence in the country thereby increasing government revenue.