Advertisement
Adverstisement

Update VAT records by Feb. 25 — Facebook asks Nigerian advertisers

Facebook has instructed its Nigerian advertisers to update their Value Added Tax, VAT records to the site on or before February 25, 2022, or risk not having their adverts displayed on the platform.

Update VAT records by Feb. 25 — Facebook asks Nigerian advertisers

Facebook has instructed its Nigerian advertisers to update their Value Added Tax, VAT records to the site on or before February 25, 2022, or risk not having their adverts displayed on the platform.

Last December, President Muhammadu Buhari sent the Finance Bill 2021 to the National Assembly for consideration and approval.

According to the Bill, the Federal Inland Revenues Service (FIRS) is authorized to evaluate non-resident firms like Twitter, Facebook, Google, and Netflix, among others, and tax them on fair and reasonable turnover earned from digital services to Nigerian customers.

Nigeria's Minister of Finance, Budget and Planning, Mrs Zainab Ahmed said that the move is part of fiscal reforms to boost revenues and diversify the oil-dependent economy. At around 4.5% of GDP, Nigeria has one of the lowest tax rates in the world and has struggled to increase tax collection from the non-oil sector.

According to the National Bureau of Statistics (NBS), the total revenue generated from VAT in 2018 stood at ₦1.108 trillion. In September 2019, the Federal Government formally announced plans to increase the VAT rate. A 50% increase from 5% to 7.5% was included in the Finance Bill.

In compliance with the government's directives, last year, Facebook announced that all advertisers from Nigeria would pay an additional 7.5 percent VAT on ad placement from January 1, 2022.

However, "it was identified that some Nigerian customers were unable to provide their 11- or 12-digit VAT ID. An update has been made so that our system will now accept both 11- and 12-digit VAT IDs", Facebook stated in a statement.

Adding that "if you have previously provided a VAT ID that is not 11 or 12 digits, please update it by 25 February 2022. All VAT IDs that do not comply with this format requirement will be removed after this day."

The social media company advised all its customers to add their VAT ID in the payment settings.

Understanding the 7.5% VAT payment.

Value Added Tax is a levy charged on each stage of production of goods and services to the end-user, usually the final buyer.

The implication of the VAT charge is that when you want to place an advertisement on Facebook or to boost a post with N1000, the money will be inclusive of a 7.5% VAT charge which means you will pay an additional N75 on the advertisement service worth N1000.

Some countries require their businesses to register for value added tax (VAT) and add a VAT registration number to their ad account. A VAT registration number is a unique identifier for the collection and remittance of VAT to the appropriate tax authorities. The specific registration thresholds and signup processes vary by country, and you should consult your local tax advisor for more details.

— Facebook

Aside from Nigeria, Facebook users from the following countries also pay for VAT: Zimbabwe, Kenya, South Africa, Cameroon, India, Australia, Russia, Quebec, Turkey, Columbia, South Korea, New Zealand, Singapore, Malaysia, Saudi Arabia.

Others are Bahrain, United Arab Emirates, Belarus, Barbados, Hawaii, Bangladesh, Chile, Indonesia, Uzbekistan, Ecuador, Argentina, Costa Rica, Moldova, the Bahamas, Mexico, Canada, Brazil, Paraguay, New Caledonia, Ukraine, Kazakhstan, Thailand, Georgia, Oman, Georgia and all European Union nations.

Get weekly insights on tech startups and VC in Africa