The Kenya government’s Income Tax (Digital Service Tax) Regulations 2020, which came into effect in January 2021 strike again. Based on the DST, Facebook will now start charging value-added tax (VAT) on the sale of advertisements on its platform.

Facebook Tax On Ads

According to the Kenyan Wallstreet,

“Beginning 1 April 2021, Facebook ads in Kenya 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 Kenya and who haven’t confirmed that they’re advertising for business purposes.” The social media giant said in a notice to its Kenyan business partners.

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KRA VAT on Online Businesses

The KRA states that a person supplying taxable services through online businesses shall be required to register for VAT in Kenya. After this, VAT shall be charged on these taxable services. They include:

1. Downloadable digital content like apps, e-books and movies
2. Subscription-based media including news, podcasts, online gaming streaming of TV shows and movies
3. Electronic data management including website hosting, online data warehousing and cloud storage
4. Supply of music films and games
5. Supply of search-engine and automated helpdesk services
6. Tickets bought for live events, theatre and restaurants purchased through the internet
7. Distance teaching via pre-recorded medium or e-learning including the supply of online courses and training
8. Digital content for listening, viewing or playing on any audio, visual or digital media.
9. Services that link the supplier to the recipient including transport and hailing platforms
10. Any other digital market supply that the Commissioner determines taxable