Advertisers on Meta platforms to pay at least 20% in taxes

Businesses and individuals who wish to advertise using Meta’s platforms including Facebook and Instagram would have to pay more to do beginning August 1, 2023. The social media giant announced the update in an email sent to advertisers in the West African country on Thursday, July 20.

Meta according to the email message is obliged to charge value-added tax (VAT) as well as other government-imposed levies such as National Health Insurance Levy (NHIL), Ghana Education Trust Fund (GETFund) and Covid-19 Recovery Levy.

All three new charges added will increase advertisers’ ad spend by 21% with the largest of it coming for VAT which is 15%. GETFund would take 2.5%, the same as NHIL and Covid-19 Recovery Levy going for 1%.

“Due to implementation of a value-added tax (VAT) in Ghana, Meta is required to charge VAT and levies on the sale of ads to advertisers, regardless of whether you’re buying ads for business or personal purposes. All advertisers with a business country of Ghana will be charged an additional 2.5% National Health Insurance Levy (NHIL), 2.5% Ghana Education Trust Fund (GETFund), 1% COVID-19 Health Recovery Levy (COVID-19 HRL), and 15% Value Added Tax (VAT) on advertising services purchased beginning 1 August 2023,” Meta announced.

For businesses that have registered for VAT, the option has been given for them to add their information to their advertising accounts so that they can use the details in their receipts to claim reimbursement if any from the Ghana Revenue Authority.

“If you’re registered for VAT and provide your name, address and VAT ID, your name, address and 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 you paid to the Ghana Revenue Authority if you are a VAT registered business in Ghana,” the statement explained. 

Ghana’s decision is a step in the direction several countries across the globe took years ago with countries such as Belgium, Denmark, France, Germany, Netherlands, Norway, Spain, Sweden, Poland and the United Kingdom taxing advertisers. South Africa, Kenya, Cameroon, Zimbabwe and Nigeria are the African countries that have already implemented VAT and other taxes on Meta adverts.