Tech News
Nigeria Joins Canada, Thailand and others in taxing digital companies
Nigeriain government has begun to amend its laws to accommodate this new digitalized era bringing many big techs under serious scrutiny.
Nigeria is one of many countries that have begun to amend its laws to accommodate this new digitalized era bringing many big techs under serious scrutiny. It is all part of a move by governments around the globe to introduce digital taxes.
Recent reports showed that there has been an uproar on social media with some concerned citizens speaking against the new tax laws included in the amendment of the Finance Act 2019 in Nigeria. Tech companies’ especially big techs, in the past few years, have faced a myriad of backlash about their involvement in tax evasion; and even more intensely, with the pandemic, came a microscopic look into the affairs of these digital service providers.
In Nigeria, one of the 129 countries under the Organization for Economic Cooperation and Development (OECD) which has yet to conclude an international agreement on digital taxation had the Finance Act 2019 amended with the aim of imposing tax on a foreign entity with respect to certain services or digital transactions if it had a ‘Significant Economic Presence’ in Nigeria, although what that entails is yet to be determined.
The new regulation would apply to companies with income of N25m or equivalent in other currencies from Nigeria in a year, and those with a Nigerian domain name (.ng) or a website address in the country.
READ MORE: Nigerians react as FIRS Chairman asks companies to pay tax before due date
Also, a foreign entity providing technical services such as training, advertising supply of personnel, professional, management or consultancy services shall have a SEP in Nigeria in any accounting year if it earns or receives any payment from a person resident in Nigeria, a foxed base or agent of a foreign entity with the exemption being payments made to employees of a foreign entity or for teaching in an educational institution.
Why this is Important?
As it stands, Nigeria, unlike some other countries, has no serious digital tax plans making the updates to the Finance Bill redundant pending a definition on the criteria for SEP. However, the existence of this law is still significant as it reduces the legal, political and civic resistance to any future digital tax plan, and giving the Minister of Finance full power regarding this makes it easy for Nigeria to implement the OECD plan when it is ready.
The economic instability is the country is remarkably disturbing and the taxation system has always been used to help distribute aggregate income more equally which by all indications ultimately protect the stability of any society. There is no better time than now seeing as with this COVID-19 era the gap of income inequality will continue to grow so this as an option to mitigate the effects is more than welcome.
Yes! There are Challenges
There are concerns as to how the Federal Inland Revenue Service (FIRS) would enforce compliance without international consensus, as a number of the companies affected might be outside the territorial reach of the agency and this problem will be worsened where the companies sell their products and services directly to individual consumers in Nigeria.
READ MORE: FG to facilitate tax incentives for SMEs
A few Considerations Moving Forward
- All developing countries, not just Nigeria will need to maintain pressure on the inclusive framework committee so that their interests can be accommodated in future digital practices.
- Regardless of the loopholes, many tech firms have used to evade paying taxes, in introducing new tax measures, it is important to avoid segregation between digital and non-digital activities.
- Tax measures should only balance the tax burden without overtaxing digital companies with the goal being to preserve neutrality and competition between companies operating in the digital and traditional spheres with fostering the economic development and the growth of startups.
No doubt it can be tempting to try and make up for the lost time without tax payments by these digital firms but it is important that policymakers be deliberate about the neutrality of their demands as ultimately, society is rapidly becoming core digital.
Business
5 Nigerian startups selected to join 7 others at the Africa Tech Summit Connects (ATS)
5 Nigerian startups to join 7 other African firms on the Africa Tech Summit Connects (ATS).
Five Nigerian firms have been shortlisted among the 12 African startups to pitch live at this month’s digital Africa Tech Summit Connects in Kigali, Rwanda.
This is to showcase their solutions to the global audience of 500 investors, corporates, and other stakeholders.
Disrupt Africa and Africa Tech Summit (ATS) disclosed it had reviewed its partnership to integrate startup-focused sessions plenary and pitching chances in its virtual Africa Tech Summit Connects event scheduled to hold virtually on the 20th – 22nd of October 2020.
What you need to know
ATS is a fully-virtual event and not a webinar. The event would maximize their time with AI-powered smart matchmaking and give startups opportunities in the online business community.
Why this matters
The three days course will enable them to engage with parties through a variety of online mediums. It would encourage the exhibition of recent developments in the continent across the start-up world, and it would focus on fintech, logistics, ed-tech, agri-tech, e-commerce, investment, regulation and policy, blockchain, connectivity.
With over 50 African tech start-up applicants seeking to raise either pre-seed, seed, or Series A funding; 5 out of the 12 selected to participate and present their solutions to the audience, and also connect virtually with those interested are Nigerian start-ups. The selected start-up companies are;
- Medsaf (Nigeria),
- Seso Global (Nigeria),
- Wella Health (Nigeria),
- Vybe (Nigeria),
- Scrapays (Nigeria),
- Agro Innova (Ghana),
- PayDunya (Senegal),
- Snode (South Africa),
- Moja Ride (Ivory Coast),
- Eneza Telecom (Kenya),
- Kolute Systems (Senegal),
- Abiria (Kenya).
Spotlight Stories
#EndSARS: Popular hacking group, Anonymous allegedly hacks Nigerian Govt. websites
Anonymous disclosed via its Twitter handle, that it had breached some Nigerian government websites.
Popular hacking group, Anonymous has claimed via its Twitter handle, that it had breached some Nigerian government websites.
READ: PZ Cussons suffers a pre-tax loss of N7.984 billion in 2020
The act is said to be in support of the ongoing #EndSARS protest that has taken over many cities in Nigeria, following calls for the disbandment of notorious police unit, the Federal Special Anti-Robbery Squad (FSARS) which has been alleged to be involved in abduction, harassment, extortion and murder of innocent victims.
READ: #EndSARS: I support the youths in this peaceful protests – Pastor Adeboye
Anonymous tweet, “Nigeria: Anonymous hacks multiple government websites in solidarity with #EndSARS protestors and retribution for violence by police. #OpNigeria #EndSARS Protest.”
#Nigeria: Anonymous hacks multiple government websites in solidarity with #EndSARS protestors and retribution for violence by police. #OpNigeria #EndSARSProtest
src: https://t.co/cjDdEfPB8w pic.twitter.com/F2J7qvz35W
— Anonymous (@YourAnonCentral) October 14, 2020
That said Anonymous did not disclose the identity of websites breached.
READ: #EndSARS: IGP says checking phones of Nigerians by any officer not acceptable
Backstory
Nairametrics had earlier given vital insights on how for years, young Nigerians, mostly via social media, have called for the unit to be disbanded and rogue elements in the force brought to justice. Despite repeated promises by the government, they have failed to heed to their demands, triggering a new wave of protests that have now spread across the country.
READ: #EndSARS: Lagos sets up N200 million fund for victims of police brutality
What you should know
Anonymous is a popular decentralized global activist group that is popularly known for many cyberattacks against several governments, government agencies, corporations, and the Church of Scientology.
READ: #EndSARS: Despite scrapping SARS, why are Nigerians still protesting?
Why it matters
From demanding an end to SARS, prosecution of rogue police officers, and reforms; protesters are more emboldened, threatening to continue if all their demands are not met. The government is scrambling to contain a situation that is escalating and could dangerously metamorphose into violent clashes with authorities, leading to loss of lives and destruction of properties.
Cryptocurrency
#EndSARS Twitter’s Jack Dorsey seeks support with Bitcoin
Twitter CEO, Jack Dorsey has joined in support of the #EndSARS protest.
Billionaire boss of the leading social media platform Twitter, and payments company Square, Jack Dorsey, has joined in support of the #EndSARS protest that has overtaken Nigeria.
A few hours ago, Dorsey took to his Twitter handle to solicit support for Nigerian protesters seeking an end to Police brutality and calling for reforms.
He tweeted, “Donate via Bitcoin to help #EndSARS,” while also retweeting a tweet from the Feminist Coalition informing people of the modes by which contributions can be made.
Donate via #Bitcoin to help #EndSARS 🇳🇬 https://t.co/kf305SFXze
— jack (@jack) October 14, 2020
Twitter CEO has been a longstanding Bitcoin supporter. In the past, he has said Bitcoin is “probably the best” native currency of the internet due to it being “consensus-driven” and “built by everyone.”
Recall, some days ago, Square, Inc. (NYSE: SQ) led by Twitter’s Jack Dorsey on October 8th disclosed that it purchased, 4,709 bitcoins at an estimated worth of $50 million.
Square added it invested in cryptos because it saw it as a tool for economic enhancement via participation in the future of payment systems, which aligns with Square’s objectives.
#EndSARS: Ex-Presidential aspirant sues Twitter and its founder, Dorsey for $1 billion
I won’t approve 2021 budget without provisions for #EndSARS victims, ASUU – Gbajabiamila
SET Plc recorded N14.4m post-tax loss in Q3 2020
2021 Budget: Senate sets motion for budget defense, commences 2020 review
#EndSARS: Human Rights Commission seeks prosecution of 35 indicted police officers
COVID-19 Update in Nigeria
Daily Parallel Market Exchange Rate – ₦460/$1
Why Airtel Nigeria credited subscribers with free airtime
#EndSARS Nigerian Rights group switch to Crypto
Lagos orders shutdown of all schools over #EndSARS protests
