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Monday, 26 August 2019

Gov’t could impose 5-10% schedule tax on social media ads

EXCLUSIVE- The government is looking to impose a 5-10% schedule tax on social media and internet search ads on top of the 14% VAT as part of anticipated amendments to the VAT Act, government sources told Enterprise. Schedule tax is a type of sales tax imposed on some luxury goods such as cars and perfume in additional to VAT. Finance Minister Mohamed Maait met with Facebook representatives last week for the second time this year to discuss the move. The government is forming a committee tasked with drafting amendments to the VAT law, Maait said last month, adding that the VAT rate will not be changed.

Background: Earlier this year, a senior ministry source told us that the ministry could impose a stamp tax of up to 20% on social media ads. Companies running ads on social media networks would be obliged to pay a 20% tax on revenues made from the ad — the same rate that would be paid for print ad purchases — in addition to 14% VAT. Meanwhile, individuals placing an ad on these sites would pay a reduced 15% stamp tax.

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