Nigerian businesses on Facebook will pay 7.5 percent value-added tax (VAT) when they place ads on the social media platform.
This will become effective from January 1, 2022.
The social media giant said this in a statement issued on Thursday.
According to the statement, the charge 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 reads.
“All advertisers with a business country of Nigeria will be charged an additional 7.5% VAT on advertising services purchased beginning 1 January 2022.
The statement added that those exempted from VAT would be able to recover the fund if they provided their tax ID.
“If you’re registered for VAT and provide your VAT ID, your VAT ID will show up on your ads receipts,” it added.
“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.”
Facebook (now META) is the parent company of Instagram, FB Messenger, and Facebook social media channel.
TheCable understands that the new 7.5 percent VAT charge will also apply to Instagram ads.
The federal government is currently working on modalities to tax the digital economy and improve revenue. President Muhammadu Buhari had transmitted the 2021 Finance Bill to the national assembly.
On Wednesday, TheCable reported that the bill empowers the Federal Inland Revenue Service (FIRS) to assess and charge companies income tax (CIT) on any digital company with a significant presence in the country, such as Facebook, Twitter, AliExpress, others.
If passed into law it will increase government revenue and widen the tax net in a cash-strapped economy.