Connect with us

Nigerian News

Nigerians are slamming latest taxes on e-commerce

Izunna Okpala

Published

on

The Federal Inland Revenue Service (FIRS) in Nigeria has confirmed that it will impose a 5% tax on e-commerce transactions that will be effective in 2020.

Babatunde Fowler, FIRS chairman described the tax as “a procedure that really should be in operation” and said the organization is collaborating with banks to ensure that the fee is automatically deducted at the point of payment.

Nigeria’s government continues to push for taxing the US$ 12 billion ecommerce sector in the country, offsetting a decline in crude oil revenue, and the move has industry experts involved.

The government has also imposed a NGN50 stamp duty on PoS transactions totaling NGN1000 through the Central Bank of Nigeria (CBN).

In a letter signed by Sam Okojere, CBN Director, Payments System Management Department, banks were authorised “to unbundle merchant settlement amounts and charge applicable taxes and duties on individual transactions as stipulated by regulators”.

Prior to this policy, charges occurred on aggregate transactions but the new policy stipulates Stamp Duties Payment on individual transactions that occur on PoS.

Official data showed over 146.3 million PoS transactions were carried out in Nigeria in 2017; the figures rose to 285.9 million transactions in 2018. From January to June 2019, a total of 187.7 million transactions were carried out, suggesting the number of transactions for 2019 is on track to exceed figures for 2018.

Moreover, a new tariff linked to the use of USSD for banking operations has been enforced as of 21 October and means that bank customers using the channel will pay NGN4 per 20 seconds.

There has been a public outcry over the tariff, especially after MTN sent SMS to inform its subscribers.

There are indications that more taxes could be introduced in Nigeria with senators proposing a 9% tax on communication services as an alternative to the proposed hike in VAT.

Health

The Impact of COVID-19 on African Tech Ecosystem

Izunna Okpala

Published

on

The Coronavirus (COVID-19) resulted in mass production shutdowns and supply chain disruptions due to port closures in China, creating global ripple effects in a unprecedented “twin supply-demand shock” across all the economic sectors.

More recently, it is stated that the number of cases in China is slowing down, raising hopes that it will eventually hit a peak and be regulated. Nevertheless, the Organization for Economic Co-operation and Development reported in early March that “annual global GDP growth is expected to decline to 2.4 per cent in 2020 as a whole, from an already sluggish 2.9 per cent in 2019, with growth likely even negative in the first quarter of 2020,” with financial markets plummeting in the days that follow.

There is a high degree of uncertainty about the spread of COVID-19 and its effects on Africa is expected to be significant, given the exposure of the continent to China. Cases in Algeria, Cameroon, Egypt, Morocco, Nigeria, Senegal, South Africa, Togo and Tunisia have been registered as yet. When there is a major COVID-19 outbreak in Africa it could already overwhelm the region’s poor health-care systems.

Coronavirus outbreak would have a downside risk for short-term growth for sub-Saharan African economies, according to ratings agency Fitch, particularly in Ghana, Angola, Equatorial Guinea, South Africa, Gabon, and Nigeria – all countries that export large amounts of commodities to China.

Last year, Africa’s Technology, Media and Telecommunications sector was expected to draw high-value investments, with many telecommunications firms looking to develop infrastructure as well as the booming e-commerce market showing potential for regional M&A. The ambiguity surrounding COVID-19, however, means that anticipated investment could be delayed as tech investors anticipate volatility and recover from the short-term impacts.

Many major technology multinationals have said that the effects of lower demand for their goods in China and the effect of breaks in the supply chain of materials required to produce their goods have negatively impacted their companies. Some have been forced to shut down shops, warehouses, production facilities and offices and let workers work from home. Labor-intensive industries are the most affected by the virus and this has impacted planned ventures, production and releases of goods in this market. It is likely to have a ripple effect in Africa and also contribute to project delays.

It is expected that if people stop going to the cinemas for fear of picking up the virus, leave the way open for mainstream broadcasters and live streaming services to enjoy staying at home film and television watchers, the global theater industry will suffer. It would be important to see what improvements film studios are making to overcome this challenge. One alternative could be using on-demand transactional video platforms for new releases. Whatever methods are introduced, the effect is likely to disrupt the conventional dependence on theaters as the first release window and, eventually, the way the film distribution industry does business could be changed forever as a result.

Wuhan in China is the world’s largest manufacturer of optical fibers and cables, accounting for a quarter of the global market. A break in the supply chain for these goods could impact the African telecommunications industry and Africa’s search to introduce fourth industrial revolution technology infrastructure. Fiber optic cable is a critical component of high-speed broadband, which is important for and implementation of 4IR technology.

When more and more customers ignore public spaces, Nigeria is also expected to see an spike in online shopping. Nigeria banks are also likely to begin testing sites for disaster recovery to ensure continued trading and business continuity where operations are affected by COVID-19 office evacuations.

Continue Reading

Nigerian News

FlutterWave support for Paga sealed

Izunna Okpala

Published

on

All companies that make use of the FlutterWave payment portal now have the opportunity to accept payment from Nigeria’s nearly 15 million Paga users.

Established in 2009, Paga is the most popular mobile payment platform in Nigeria, and has some 15,000 agents across Nigeria. It provides a variety of financial services including free money transfers, bank accounts deposit, airtime purchase / sending, bill payments, remittances, bulk disbursements & collections that are accessible through online platforms (web / app) and any cell phone through the USSD code *242#.

FlutterWave is a payment gateway for merchants who enable e-commerce merchants across several African countries to accept payment through:

  • Debit and Credit Cards
  • Bank Account
  • Mobile Money
  • POS
  • M-Pesa
  • Visa QR
  • Bank Transfer
  • USSD

Flutterwave recently raised a $35 million Series B round for payments in Africa and confirmed a collaboration with Worldpay FIS.

In 2016 a team of ex-bankers, businessmen and engineers created the fintech startup.

Continue Reading

Nigerian News

MTN announces investment of 1,6 billion US dollars in Nigeria

Izunna Okpala

Published

on

mtn building

MTN Group plans to invest 1,6 billion US dollars over the next three years in its network and operations in Nigeria.

The company’s board member, Mcebisi Jonas, made the announcement during a recent visit with Muhammadu Buhari, Nigeria’s President.

Jonas said, “We are fully aligned with the government’s policy agenda, and committed to improving the country’s digital economy.”

Buhari shared the Nigerian Government’s commitment to ensuring that companies like MTN thrive in the country in creating an enabling environment.

“I am delighted to hear about the progress you are making in Nigeria, especially in supporting our digital inclusion programmes. Your proposed initiatives, such as the rural telephony project, will certainly complement our economic diversification and financial inclusion programs by linking rural producers with consumers in our major cities,” he said.

Nigeria’s President also revealed ongoing plans by the government to improve security of telecoms installations, regarded as critical national infrastructure.

“Our hope is for operators like MTN to continue to focus on delivering quality service at reasonable prices. If we put our minds together, such win-win positions are achievable,” Buhari added.

MTN Group and the Nigerian government are striving to mend relationships that have been strained of late because of industry-record fines, sanctions and threats.

“MTN remains fully committed to meeting our fiscal responsibilities and contributing to the social and economic development of Nigeria and all regions where we operate,” said MTN Group chief executive officer Rob Shuter.

Nigeria remains a key market for MTN Group. MTN Nigeria has been listed on the Nigerian Stock Exchange and has secured a super-agent license which clears the way for the launch of its Fintech business.

Despite complaints about a ‘challenging operating environment,’ according to its consolidated financial report for the nine months ended September 30th, 2019, MTN Nigeria’s profit grew by almost 30 per cent.

Continue Reading

Trending