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Nigerians to pay 7.5% VAT on Facebook ads from January 2022

Popular social media app, Facebook has announced that starting from January 1, 2022, Nigerians are to pay 7.5% value-added tax on Facebook ads.

The social media giant said in a blogpost said that Facebook ads in Nigeria are subject to a value-added tax (VAT) at the applicable local tax rate. This applies to advertisers whose “Sold to” country on their business or personal address is set to Nigeria.

Add your VAT ID in the payment settings. 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 that you paid to the Nigerian tax authorities if you are a VAT-registered business in Nigeria.

VAT is added whenever you’re charged for your ads, regardless of whether you’re purchasing Facebook ads for business or personal purposes. As 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. If you pay for Facebook ads with a manual payment method, VAT is accounted for and applied at the applicable local rate when your ad account is funded to determine the total balance available.

Facebook the parent company of Instagram, Facebook Messenger, and Facebook social media channel which means the new 7.5% VAT charge will apply to all channels.

In other news, Zoom to Start Charging 7.5% VAT on customers in Nigeria from January 1, 2022. Zoom Video Communications in a statement on Monday December 13, days after Facebook made the same announcement.

The statement read; “For customers with a sold to address in Nigeria, Zoom will begin applying VAT to invoices and remitting the VAT collected through Zoom’s VAT registration in Nigeria in accordance with the new rules relating to Value Added Tax for Non-Resident Suppliers of Electronically Supplied Services.“Zoom is routinely evaluating its indirect tax collection and remittance obligations.

The application of these taxes to businesses with online activities is a complex and evolving area.“This applies if you are registered for VAT in Nigeria and if you are not registered for VAT in Nigeria.“Zoom continues to review such developments, as well as the nature and extent of its activities in different jurisdictions, and, based on such regular review, will start charging indirect taxes where applicable.

“To provide your TIN, please complete the following steps:”Sign in to the Zoom Portal.“In the navigation panel, click Account Management, then Billing.Click the Billing Information tab.“Under Sold to Contact, choose to edit the TIN (which appears after the Sold to Contact Address field).“Enter your TIN and click save.“You are required to notify us if there is a change in your VAT registration status.”The company said it will only be collecting VAT for invoices generated on or after January 1, 2022.“Invoices prior to this date will not be impacted.”

In September 2021, the president of Nigeria, President Muhammadu Buhari ordered the deployment of technology to tax all digital transactions carried out across the country. The Federal Government of Nigeria has since been making plans to work on the modalities to tax the digital economy which will increase government revenue and widen the tax net in a cash-strapped economy.

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