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Nigerians are slamming latest taxes on e-commerce

Izunna Okpala

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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.

Apps & Services

The Adoption rate of the Apple-Google COVID-19 tracker feature in Nigeria

Izunna Okpala

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The COVID-19 exposure tracker has recently been rolled out by Google and Apple on every Android and iOS device globally. According to the notice released in May, this was done in an effort to fight the spread of the virus through contact tracing — a technique used to stay aware of exposure to an infected person.

When enabled, the feature allows your Smartphone to receive notification of likely COVID-19 exposure.

However, there is a disclaimer that the software is an API that can only be enabled when the device has installed a third party tracking app.

According to the statement, the feature will remain dormant until it is activated by a COVID-19 contact tracing app, which can be deactivated at any time.

COVID-19 Exposure Notification feature cannot be activated without an installed contact tracing app

Google and Apple therefore say that the devices won’t be theirs thus saying that the identity of the user won’t be shared with other users.

To ensure this, Google announced that “Access to technology will only be provided to public-health users. Their applications must meet strict Privacy, Protection and Data Use requirements.”

Still, app creators should be committed to minimise the vulnerabilities of their products.

On Android phones, the feature can be found in ‘Google‘ under ‘Settings‘ where ‘COVID-19 exposure notification‘ is displayed. For Apple devices, ‘COVID-19 exposure logging‘ is found under ‘Health‘ in ‘Privacy settings‘.

Apple-Google COVID-19 Exposure Notification feature

By design, this technology is meant to support the efforts of governments and private players that are building contact tracing apps. When an app is used to opt in, it generates randomly changing IDs based on location. Through Bluetooth, it periodically checks other IDs to confirm if any is associated with the infection. And if it finds any, it sends a notification.

For this to work, a person who is affected or has been exposed to the infection needs to share their IDs with the app, which will immediately alert all that have come in contact with them.

While countries like India make contact tracing apps compulsory for residents, only a few startups have made an attempt at this technology in Nigeria; this explains why adoption is low.

In fact, on the Google Playstore, there’s currently no authorised contact tracing app available in the country currently. Conversely, on the Apple app store, it shows two apps, one of which has already been disabled.

Despite some countries already putting the pandemic behind them, infection cases are unfortunately still increasing across Nigeria. Currently, the figure stands at 25,694, with Lagos state  — 10,510 confirmed cases — still the epicentre.

As economic activities resume fully in states that were previously on mandatory lockdown, this appears to be the time for the adoption of massive contact tracing tools to reduce citizens’ chances of infection.

Recall that before now the use of smartphone tracking and surveillance for COVID-19 tracing have been adopted across the world in China, Hong Kong, Israel, and even in Rwanda.

But there are concerns that this feature has privacy risks, disproving Google and Apple’s promise. Considering past events, this scepticism is not misplaced.

Google, like other tech giants, has at some point been accused of turning user data into narrowly targeted ads without consent. This is often possible because users are usually unaware of the data they are agreeing to share and the company’s plan for the information.

While these privacy concerns remain, we cannot undermine the possible positive impact of the tools this Apple-Google feature will effectively support. Perhaps, it is a case of choosing the lesser evil.

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Inventions

OPay finally restructures business model; drops super app ambition

Izunna Okpala

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Earlier this week, news emerged that Opera-backed Nigerian fintech company, OPay reportedly shut down all of its Nigerian business activities following a letter from its international investors.

A report claims that all the startup verticals, including ride hailing, ORide and OTrike — still active in other states beyond Lagos; recently launched B2B and B2C eCommerce platforms, OMall and OTrade; logistics OExpress; and food delivery feature, OFood will be closed.

It added that all motorcycles initially redirected into logistics earlier in the year will be retrieved.

Conversely, based on an official statement from OPay, this bears only a few truths.

“We can confirm that some of our business units including the ride-hailing services, ORide, OCar, as well as our logistics service OExpress will be put on pause. This is largely due to the harsh business conditions which have affected many Nigerian companies, including ours, during this COVID-19 pandemic, the lockdown, and government ban,” the statement reads.

It goes ahead to say verticals like OMall, OTrade, and other services remain unaffected.

Perhaps, this explains OPay’s comment that it will now focus on rendering only financial services.

While insisting that its main focus is fintech, OPay claims that its mobile money and digital payment services have been profitable so far. However, the statement further maintains that this restructuring has only a little influence on the startup’s profitability.

Consequently, it appears that OPay’s focus will continue to be on its payment platform to push mobile money, lending, and investment services while waiting for the new eCommerce platform to find its feet.

As we have noticed while chronicling the journey of the Chinese-backed startup since launch, the past six months have been a pretty rough ride: from Okada and Tricycle ban in its major market, Lagos to taking down OKash, its money lending feature from the mobile app on alleged violation of Google services. And recently, the closing down of some of its services while unavoidably laying off employees as a result.

Regardless, the startup maintains that it is hugely funded and has remained highly profitable.

It remains to be seen how OPay would fare in the coming months as it moves into its third year of servicing the Nigerian market.

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Inventions

Jobberman partners with VerifyME for efficient last-mile authentication

Izunna Okpala

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Digital identity and technology company Know-Your-Customer (KYC), VerifyMe, has formed a partnership with Jobberman, the Lagos-based job portal and career platform to boost capacity and create jobs for Nigerian youth.

Despite current COVID-19 challenges, the duo said Nigerian youth deserve better jobs, especially in the technology space.

The strategic alliance will see Jobberman recruiting massive verification agents from each State and local government area to potentially create more than 30,000 jobs. This initiative marks Nigeria’s largest investment in last-mile authentication capacity building, and underpins VerifyMe’s dedication to building confidence infrastructure in Africa.

The CEO VerifyMe Nigeria, Esigie Aguele said: “We are pleased to announce this partnership with Jobberman aimed at boosting capacity throughout the country for our last-mile verifications but also creating jobs and providing opportunities for people from all walks of life. This comes on the heels of our growing stakeholder interest in identity verification and KYC as a regulatory compliance standard and an anti-fraud measure and loan.

“Additionally, this alliance is noteworthy because it represents a break from standard practice in the verification industry. The status quo is to recruit unqualified or low-skilled personnel to conduct these critical investigations with serious implications for the integrity of the provided data.”

“We’re confident that this partnership between VerifyMe and Jobberman, two industry leaders with proven experience and reputation in their sector, would enable all stakeholders to create the trustworthy relationships they need to ensure their business transactions,” Aguele added.

Speaking for Jobberman, the CEO Hilda KabushengaKragha said: “We are excited to partner with VerifyMe on this monumental project that will employ 36,000 young people across the country. In the next five years, Jobberman has set an ambitious target of connecting three million Nigerian youth to work, and this partnership is a solid step in this direction.”

Over 10,000 corporate organizations, including banks and government agencies, use the digital trust infrastructure VerifyMe provides for their business. The ID Verification capabilities of VerifyMe include direct access to databases for Nigerian Identity Management Corporation (NIMC), Bank Verification Number (BVN), and Drivers’ License.

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