Kenyans using Facebook to sell products will be taxed as per new digital service tax regulation

NAIROBI, Kenya - The Kenya Revenue Authority[KRA] will as of next year January start taxing Kenyans who use Facebook to advertise products. This follows a new regulation issued by Meta Platforms Inc, the company that owns Facebook, WhatsApp, and Instagram.

The tech giant issued updated terms allowing Facebook to share information with the taxman and Kenya’s investigative authorities from January of those Kenyans using its platforms to generate income.

The new terms which take effect from January 3, 2023, include the advertising contents and all information associated with the publicity placed on its platform.

This comes at a time when the taxman has increased its surveillance on Kenyans displaying lavish lifestyles on social media but paying little or no taxes.

KRA has been struggling to impose 1.5 percent of its gross transaction value as digital service tax to firms operating online.

The taxman eyes to collect KSH 14 billion from the digital tax over the next three years from firms using the Internet to market and sell products in Kenya.

The digital service tax came into effect at the start of January 2021. It is levied on the sale of e-books, movies, music, games, and other digital content. It also applies to foreign companies.

The KRA target targets firms like Amazon and Netflix are forecast to generate sales of about KSH 926 billion in three years.

Meta believes that it can use information about one’s interactions with ads and other commercial content, including monitoring one’s creditworthiness and categorizing clients as invoiced or non-invoiced.

The Meta statement read“Meta may classify clients as invoiced clients based on factors such as ad spend and credit worthiness. You understand that, from time to time, we run tests on our Self-serve Ad Interfaces and related systems, which may affect your use and experience thereof, including campaign performance. If you are making direct debit payments, you agree that we can charge you any amount that falls within the range that you agreed to upon sign-up. We will notify you in advance if any charge will exceed the agreed-upon range.”

Currently, there are over 12 million Facebook users in Kenya. Instagram users stand at 2 million and 22.2 million daily WhatsApp users in 2022, according to analytics firm Statista.

There have been increasing data restrictions and changes in the digital advertising landscape, and Meta is swamped by lawsuits on data leaks and privacy breaches.

Kenya’s Data Protection Act stipulates that personal data shall not be transferred outside the country unless there is proof of adequate safeguards or consent from the data subject.

GAROWE ONLINE