Connect with us

News

Benin Becomes Third African Country to Introduce a Social Media Tax

Published

on

social media tax Benin

The government of Benin Republic has introduced new levies on telecommunications operators with two taxes relating to the use of telecom services by consumers.

New “Social Media Tax” in Benin

Patrice Talon, the president of the Benin Republic, adopted a decree on July 25, 2018. It prescribes levies on telecom operators based on taxes related to use of OTT services and the internet.

As stated on the Internet Sans Frontiers website, the contribution of the consumption of electronic communications services does not only affect Over-The-Top (OTT) applications and social networks. It also hits the voice, SMS and Internet services.

They are subject to a tax of five percent of the price excluding tax, also levied each month by the service provider.

An Alarming Trend in Africa

The ISF promotes the free flow of information, defends digital freedoms and fights against censorship on connected networks. It criticised the tax decision because it contradicts the Benin government’s ambition. The government wants to make the digital economy a strategic sector for economic recovery. Instead, it increases the cost of Internet access, which is already very high in the country. It has the effect of tripling the price of the consumption of Internet packages for the poorest consumers in Benin.

social media tax BeninParadigm initiative has also issued a statement against the tax. According to Tope Ogundipe, Paradigm Initiative’s Director of Programs, they condemn this alarming trend in Africa countries. A growing number of states in Africa have begun to impose taxes on the use of various digital communication services.

The Zambian government recently announced the creation of a new online tax where phone calls made over the Internet will be subject to a daily levy.

Moreover, earlier this year, the government of Uganda forged a policy to impose taxation on social media platforms to curb what is referred to as ‘Lugambo’ (gossip) by the President on platforms such as Whatsapp and Facebook.

The Association of Licensed Telecommunications Operators of Nigeria (ALTON) is pressuring the Nigerian Telecommunications Commission for similar practices to be adopted in Nigeria. According to ALTON, the activities of the OTT service providers are eating into the revenue telcos used to enjoy.

Slowing Down ICT Development in the Region

According to Qémal Affagnon, West Africa Coordinator of Internet Sans Frontières, regulations to tax the use of messaging applications or social networks are tariff barriers to free expression, which must be denounced. To put the burden of this funding on the shoulders of users is an unfair choice that violates freedom of expression and threatens everyone’s access to a free and open Internet.

This tax clearly only focused on financial gain and undermines the current efforts to bring accessibility of ICT to African countries.

Internet Penetration in Benin currently stands at 33.1 percent, in Zambia, it is 41.2 percent, in Uganda it is 42.9 percent, and in Nigeria is 50.2 percent. Internet technology has slowly been developing over the years and this move by the government actively stifles its development. It also violates the recommendations of the International Telecommunications Organization regarding the taxation of electronic communications. 

Bitcoin

Alleged Con Man Taken to Court in Kenya Over Fake Bitcoin Deal

Published

on

Fake Bitcoin Deal

A man is reportedly facing charges in a Nairobi court after allegedly swindling an accountant out of 375,000 Kenyan shillings (KES) in a fake bitcoin deal. The accused, Patrick Kamau, allegedly committed the fraud on several dates between December 2018 and May 2019.

Bitcoin Investment Deal Goes Sour

Kamau reportedly promised to open a forex trading account for the complainant and invest in forex bitcoin through BNB Forex. Benjamin Mugoya entered into the deal with the hope of making crypto trading profits after a friend introduced him to Kamau. The accused posed as a sales representative for BNB Forex in Kenya.

BitcoinGet

To open the forex trading account, Kamau asked Mugoya to wire KES400,000 to his bank account. However, after receiving a total payment of KES375,000 on May 22, Kamau switched off his phone.

In addition to this payment, Mugoya had sent Kamau KES50,000 in two installments in December 2018 and January 2019.

This is not the first bitcoin-related case that has been heard in a Nairobi court. In 2017, three bitcoin traders were charged with allegedly stealing KES10.2 million from I&M bank and Mpesa. The case involved a purchase of bitcoin from the traders using stolen money.

The case against Kamau has been scheduled for 22 February 2020. The accused was released on a cash bail of KES150,000 or a bond of KES200,000.

Unregulated Crypto Space

Mugoya could be one of many victims that have fallen prey to fake bitcoin investments despite the Central Bank of Kenya’s warning against investing in bitcoin.

The Bank’s Governor, Patrick Njoroge, has been vocal about the risks associated with cryptocurrencies such as fraud.  In 2018, the Governor ordered Kenyan banks to refrain from making crypto transactions or engaging with entities transacting in virtual currencies.

The unregulated crypto space in Kenya means that victims of crypto fraud are unprotected, thereby, preventing them from recovering their funds. However, with sufficient evidence, Mugoya could obtain justice from the Kenyan court system.

Continue Reading

News

DRC, Tunisia to Invest in Tech-Focused Impact Fund BLOC Smart Africa

Published

on

BLOC Smart Africa

The Tunisian and DRC governments have signed a declaration with Bamboo Capital Partners and Smart Africa to invest in the tech-focused impact fund, BLOC Smart Africa.

The agreement was made in Tunis at the Afric’Up Summit, an event that aims to promote innovation, entrepreneurship, and tech startups in Africa. The 2019 theme was “smart cities and open innovation in Africa,” featuring conferences and workshops with more than 150 speakers and investors.

BLOC Smart Africa

Smart AfricaBLOC Smart Africa is an impact fund that uses blended finance to invest in African startups with social and environmental impact-driven projects that leverage new technologies. For the first fund, the company has a target size of €100 million. The government of Togo committed €5 million in March for the first tranche.

Djibouti and Chad have also expressed their support for the Smart Africa project and they intend to formalise their commitment to the BLOC Smart Africa fund soon. Additionally, Burkina Faso has created an ad-hoc commission that will consider whether the country should become a founding member of the BLOC Smart Africa fund.

“We are delighted to see our partnership with Bamboo Capital Partners evolve today, with the signature of a declaration of intention from the Governments of the Democratic Republic of the Congo and Tunisia, and with the support of the Governments of Burkina Faso, Chad, and Djibouti. BLOC Smart Africa aims to identify and develop the next generation of pan-African technology champions in close co-operation with our members, partners and local technology ecosystems in the public and private sectors. We look forward to seeing our partnership bear fruit by giving young talent across the continent the opportunity to give free rein to their creativity and entrepreneurial spirit,” said Smart Africa CEO, Lucina Koné.

Smart Africa is an initiative comprising of Heads of States and governments from seven African countries that seek to boost sustainable socio-economic development through ICT. The member states include Rwanda, Burkina Faso, South Sudan, Gabon, Mali, Uganda, and Kenya.

In May 2019, Bamboo Capital Partners signed a partnership agreement with Smart Africa to support the BLOC Smart Africa fund. Through the collaboration, Bamboo will offer access to regional and local ecosystems such as incubators and source deal flow.

Jean-Philippe de Schrevel, founder and managing partner of Bamboo Capital Partners, said: “For over a decade, Bamboo has been at the forefront of impact investing, backing companies with innovative solutions to improve the lives of communities in emerging markets. With the support of these countries, we look forward to investing in companies using the latest technology to tackle major social or environmental challenges.”

Bamboo is a commercial private equity company launched in 2007. The firm has offices in Luxembourg, Bogota, Nairobi, Geneva, and Singapore.

Continue Reading

Bitcoin

Nigeria’s Capital Markets Regulator to Create Framework for Cryptocurrency Regulation

Published

on

Framework for Cryptocurrency Regulation

Nigeria’s blockchain community and cryptocurrency exchanges could get a clear stance on the classification of cryptocurrencies from the country’s Securities and Exchange Commission (SEC) before the end of the year.

A Framework for Cryptocurrency Regulation Is Coming

According to a report by Pulse, the regulatory institution is set to implement the roadmap for the fintech industry as it pertains to its capital markets. According to the roadmap, between the last quarter of this year and the first quarter of 2020, the SEC is expected to:

  • Decide on its preferred classification of cryptocurrencies (either as commodities, securities or currency).
  • Develop a framework for the regulation of Virtual Financial Assets (VFAs) and VFA Exchanges.
  • Issue guidelines and standards for whitepapers and ICOs.
  • Develop a framework for KYC and due diligence for cryptocurrencies, Virtual Financial Assets, tokens, and ICOs.
  • Define clear classification for tokens based on their unique properties. They could be payment tokens, asset tokens, utility tokens or others.  

The Acting Director-General of the SEC, Mary Uduk, revealed at a Capital Markets Committee briefing last month that the Working Group to drive the implementation of the roadmap would be chaired by Adeolu Bajomo, the Vice-President of the Fintech Association of Nigeria. 

Cryptocurrencies as Commodities or Securities But Not as Currency

traderOne of the recommendations that stands out in the roadmap, which was prepared by a committee comprised of officials from the regulatory agencies, the private sector, and a member of the blockchain community, is for the SEC to recognise cryptocurrencies as commodities or securities, and not as a currency. This classification is expected to have tax implications for investors.

This recommendation is in line with the central bank’s directive last year, which stated that “virtual currencies” were not a legal tender.

Cryptocurrencies have lacked a single, definite identity. For example, Germany is treating them as money and means of payment while the US uses the Howey test to decide whether a cryptocurrency is a security or not.

Crypto Adoption in Nigeria

Citigroup, a US investment firm, reported in January 2018 that Nigerians were the third-largest holders of bitcoin as a percentage of gross domestic product (GDP). The use has ranged from ­trading to making fast, low-cost cross-border transactions, saving on the high fees taken by commercial banks and traditional money-transfer services.

Nigeria has a fast-growing young population with a significant chunk below the age of 35. But there is still a small number of people with access to the financial system. Less than 50 million people with bank accounts in a population of over 180 million. Blockchain applications could be a great way to onboard millions of underserved people into the financial system.

With the SEC expected to take responsibility for the regulation of cryptocurrencies in the country soon, we can foresee more scrutiny of Nigeria’s biggest crypto companies, which could lead to a more secure crypto trading ecosystem down the road. 

Continue Reading

Popular Posts