Locals are now required to pay Value added tax (VAT) on all adverts shared via social media platform Facebook with effect from 1 September 2020, the company has said.
The tax is being charged at the applicable tax rate, which according to the Zimbabwe Revenue Authority (ZIMRA) is pegged at a standard rate of 14.5%.
Businesses and individuals whose purchases have been made to Zimbabwe on their address are obliged to pay the tax.
The development was announced on Facebook’s business help centre Facebook said that,” Beginning on 1 September 2020, Facebook ads in Zimbabwe will be 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 Zimbabwe.”
Facebook added that, “VAT is added whenever you’re charged for your ads regardless of whether you’re purchasing Facebook ads for business or personal purposes. Because 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 prepaid payment method, when you create your first ad on Facebook, you add a payment method to your ad account.
That payment method determines your payment setting. If you select any local manual payment method (e.g. PayTM or Boleto Bancário), your ad account is set up for manual payments. This means that you manually add money to a prepaid balance on your ad account before your ads run.
What is VAT, Value Added Tax (VAT) is an indirect tax on consumption, charged on the supply of taxable goods and services. It is levied on transactions rather than directly on income or profit, and is also levied on the importation of goods and services.