As Kenya's 16% VAT on digital transactions takes effect, LinkedIn responds by hiking subscription fees for Kenyan users – Business Insider Africa

Business Insider Edition
LinkedIn users in Kenya will now pay additional membership fees to access special features/services on the career-focused and jobs advertising social media platform.
Business Insider Africa gathered that the company hiked its membership rates, with effect from May 11th, following the implementation of a 16% value added tax (VAT) on digital transactions in the East African country.
READ: Ghanaian lawmakers have finally approved the e-levy bill that caused a fight among them in December
Part of a communique by LinkedIn to this effect said: “We want to provide you with an important tax update related to Kenya tax that will impact your LinkedIn purchase(s). Kenya has introduced tax at 16 percent on e-Services. In order to comply with these laws and regulations, this tax will be added to your current LinkedIn purchase starting on May 11, 2022”.
The communique further noted that users who provide their valid PIN IDs will not be subject to the tax. That’s because “if a valid Kenya tax number has been provided, this will be accepted by LinkedIn as notification of your responsibility to account for VAT under the reverse charge mechanism.”
This clearly shows that LinkedIn is pushing the costs of the VAT to its Kenyan users instead of incurring them.
Do note that LinkedIn is not the only tech firm that has done this in the wake of the 16% VAT on digital transactions. As a matter of fact, Kenyan users of Facebook, Netflix and even Google have been paying the 16% VAT longer than LinkedIn users.
READ: Top 10 African countries with the highest corporate tax rates
Below are the new rates for different LinkedIn services
It should be noted that a handful of African countries have been introducing various forms of digital tax aimed specifically at big tech companies that make money across Africa even without being incorporated in any of these countries. This was one of the issues that came up during the recent face-off between Nigeria and Twitter.
Recall that late last year, about 130 countries reached an agreement to address the global tax challenges that have risen, following the digitisation of the global economy. Championed by the Organisation for Economic Co-operation and Development (OECD), the agreement aims to, among other things, reform the global tax rules in such a way that gives countries more right to impose taxes on multinational digital corporations like Facebook and Google.
READ: Why the new global tax agreement is a welcome development for Africa
An earlier article by Business Insider Africa detailed some of the ways this was a wonderful development for African countries. The Africa Tax Lead at Ernst & Young, Larry Eyinla, even noted that “this is actually a fundamental step in the right direction.”
Meanwhile, there is a concern that these global tech giants may want to completely evade these new taxes from African countries by simply pushing the costs to their users.
Thanks for signing up for our daily insight on the African economy. We bring you daily editor picks from the best Business Insider news content so you can stay updated on the latest topics and conversations on the African market, leaders, careers and lifestyle. Also join us across all of our other channels – we love to be connected!
© 2022


Leave a Comment