TechPression

Tag: tax

  • Crypto prices and stocks slump over Trump’s new trade taxes

    Crypto prices and stocks slump over Trump’s new trade taxes

    On Thursday, cryptocurrency prices and related stocks fell sharply after U.S. President Donald Trump announced new taxes on imports, sparking concern in global markets.

    Fearing a potential trade war, investors sold off risky assets, including Bitcoin and tech stocks.

    Read also: Elon Musk denies U.S. government plans to adopt Dogecoin

    Major declines across the crypto market

    Coinbase, a popular crypto exchange, dropped nearly eight percent, while MicroStrategy, a big Bitcoin investor, fell over five percent. Bitcoin mining companies like Marathon Digital and Riot Platforms also saw losses between five percent and nine percent. Bitcoin itself fell almost four percent, and Ethereum dropped more than five percent.

    Experts say the drop shows that crypto is now reacting more to big economic changes. “Crypto moves with global markets, just like stocks,” said David Hernandez from 21Shares. “When investors get nervous, they sell risky assets like Bitcoin.”

    Despite the drop, some believe crypto could recover faster than stocks. “Bitcoin is still holding strong at key price levels,” Hernandez added. Others think trade wars might actually help crypto in the long run.

    “Higher taxes on trade could weaken the U.S. dollar,” said Marcin Kazmierczak of RedStone. “If people lose trust in traditional money, they may turn to Bitcoin as an alternative.”

    For now, markets remain shaky. But if things calm down, crypto could see a quick rebound as investors look for bargains.

    Read also: Trump pledges to make U.S. the world’s crypto capital

    Key facts about the stock market

    The stock market is where investors buy and sell publicly traded company shares. It plays a key role in the economy, allowing businesses to raise capital and individuals to invest for potential profit.

    Stock prices change based on company performance, economic conditions, and investor sentiment. Major markets include the New York Stock Exchange (NYSE) and Nasdaq. Factors like interest rates, inflation, and global events can impact stock movements.

    While investing in stocks offers growth opportunities, it also carries risks. Many investors diversify their portfolios to manage risk and maximise returns over time.

  • Nigerian government proposes 5% tax on telecom, betting and gaming services

    Nigerian government proposes 5% tax on telecom, betting and gaming services

    As part of a new plan to restructure Nigeria’s tax system, the federal government has proposed a five percent excise fee on gaming and betting operations, as well as telecom services.

    The bill was obtained from the National Assembly on October 4, 2024, and was titled “A Bill for an Act to Repeal Certain Acts on Taxation and Consolidate the Legal Frameworks relating to Taxation and Enact the Nigeria Tax Act to Provide for Taxation of Income, Transactions, and Instruments, and Related Matters.”

    Read also: New tax bill: Nigerians must present tax ID to open, operate bank accounts

    The aim of the new tax bill on telecom services, others 

    The goal of the new legislation, according to an examination of it on Friday, is to impose excise taxes on services like betting, lotteries, gaming, and telecoms that are offered in Nigeria.

    A part of the bill read, “The amount of an excisable transaction is the amount chargeable for the service by the service provider, both in money or money’s worth.”

    “Services, including telecommunications, gaming, gambling, betting, and lotteries however described, provided in Nigeria shall be charged with duties of excise at the rates specified under the Tenth Schedule to this Act in a manner as may be prescribed by the Service.”

    According to a breakdown of the excise tax structure in the bill, telecom services, which include prepaid and postpaid services under the Nigerian Communications Commission’s regulation, will be subject to a five percent charge.

    Lottery services, gaming, gambling, and betting will all be charged at the same rate.

    Read also: Mauritius’ Axian Telecom buys Zuku parent company

    Tax bill on currency exchange rates 

    The bill stipulates that there will be an excise fee imposed on any difference between the current Central Bank of Nigeria exchange rate and the actual transaction rate, in addition to establishing requirements for currency transactions.

    The introduction of the new tax system is part of the government’s strategy to boost non-oil revenue in light of the nation’s fiscal challenges .

    The government is leveraging the rapid growth of the gambling and telecom sectors to boost its tax revenue.

    Using a self-assessment technique, the law also aims to ensure that currency trades correspond to official CBN rates, with any discrepancy being paid as excise duty.

  • Nigerians to bear FG’s 5% new telecom tax

    Nigerians to bear FG’s 5% new telecom tax

    The Federal Government of Nigeria will bring back the 5% tax fee that was put on mobile, fixed, and Internet services earlier this year. 

    Mrs Zainab Ahmed, Minister of Finance, Budget, and National Planning, announced the telecom tax increase in a circular dated April 20, 2023.

    According to Prof. Isa Pantami, Nigeria’s Minister of Communications and Digital Economy, the government took away the excise duty tax from the telecom sector last month. 

    This was done based on the recommendations of the Presidential Review Committee, which looked into whether the duty should be applied to the telecom sector, which is already thought to have too many taxes and other fees.

    Prof. Isa Ali Pantami at that time stated that it was part of the government’s commitment to reviewing the amount of taxes that operators in the telecom business are subject to. But now, the FG is reneging on that to uphold the country’s 5% excise duty for telecom operators.

    Read also: House of Representatives probe NCC failure to promote mobile telecom services

    Telecom tax problem

    The Federal Government stated in July 2022 that there would be a 5% telecom excise duty levy to bring in more money. “It’s common knowledge that our income can’t cover our financial obligations, so we need to focus on income from sources other than oil,” said Zainab Ahmed, the minister of finance, budget, and national planning.

    Telecom companies said that normal Nigerians would pay the fee by increasing the consumption tax on telecom services to 12.5%. 

    The National Association of Telecoms Subscribers sued the Federal Government in response.

    A committee reviewed the tax after the administration suspended it. During the first meeting of the Presidential Committee on Excise Duty for the Digital Economy Sector, Prof. Pantami made the announcement.

    The minister said that the information, technology, and communication sector, especially the telecom business, is already overburdened by too many different taxes, which will hurt the sector if the government doesn’t do something.

    Pantami remarked, “The ICT sector is being overburdened with too many types of taxes,” adding, “If care isn’t taken, this will put at risk the progress we’ve made in the sector so far. 

    Pantami declared in March 2023 that the government would remove telecoms from excise taxes since it cared about Nigerians’ hardship.

    Pantami, who led the Committee to evaluate the excise tax, said the Committee had done its national job and delivered to the President its report explaining why the industry should be disregarded.

     

    Telcos pay high taxes

    In response to the committee’s evaluation of the excise duty, Professor Pantami stated that operators in the Nigerian telecommunications sector already pay a substantial amount of taxes, fees, and levies.

    In the press conference explaining President Buhari’s excise tax removal, Prof. Isa Alli Pantami noted that telecom operators in the digital economy industry pay 41 different taxes, levies, and charges.

    Mr. Tony Emoekpere, who is the President of the Association of Telecommunications Companies of Nigeria, said that putting an excise duty tax back on telecom services would bring back a lot of problems for the business.

    The advantages of getting rid of it would be lost, he claimed, if it were brought back. We regress. We usually complain about taxes, so when the federal government eliminated excise duty, that helped.

    Recall that some of the numerous taxes we must deal with are imposed in jurisdictions over which the federal government has no direct control, such as the states. Restoring it puts us back where we started.

    It’s important to note that telecoms have always been a big part of the Nigerian economy in terms of gross domestic product (GDP).

    Another reason to resist the excise duty in the telecom sector is that, while the cost of all production elements has gone up, leading to increased pricing for products and services, the cost of service in the telecom sector has stayed the same or even gone down over the past few years. “Adding more burden will destroy the sector,” the minister remarked in March.

    Gambia Praises Nigeria on Telecom Regulation

    What the latest circular says

    Taiwo Oyedele, a partner at PwC and the Africa Tax Leader, put the memo on LinkedIn. The circular was called “Approval for the Implementation of the 2023 Fiscal Policy Measures and Tariff Amendments.” It had the number HMFBNP/MDAs/CIRCULAR/2023 FP/04.

    In the circular, the Minister stated that the excise duty on telecommunication services, which had been put in place through the Finance Act 2020 and written down in the Official Gazette No. 88, Vol. 109, of May 11, 2022, with the President’s approval, would be put into effect.

    It says that the 5% tax applies to GSM mobile phone services, landline phone services, and internet services, both for postpaid and prepaid customers.

    The policy further introduces additional excise taxes ranging from 20% to 100% increases on previously approved rates for alcoholic beverages, tobacco, wines, and spirits, effective June 1, 2023.

    It said, “The revised excise duty rate on alcoholic drinks and tobacco products in line with the existing excise regime implementation period shall take effect from June 1, 2023, and shall be reviewed upwards in line with the new regime by June 1, 2024.”

    “These are new and higher ad valorem excise charges and specific rates that are in addition to the 2022 FPM’s approved Roadmap for 2022-2024. The excise fee rate on non-alcoholic drinks, on the other hand, remains at N10 per litre.”

    “The excise duty on single-use plastics will also go into force on June 1, 2023.” “On the other hand, the excise duty rate on telecommunication services will stay the same as it was passed by the President and published in the Official Gazette No. 88, Vol. 109, on May 11, 2022.”

    “The tax is 5% and applies to both postpaid and prepaid mobile phone, landline, and internet services.”

  • FG lower exercise tax on telecommunications services in Nigeria 

    FG lower exercise tax on telecommunications services in Nigeria 

    The Federal Government of Nigeria has decided to lower the excise tax on telecommunications services by 5% in order to help Nigerians, according to the Minister of Communications and Digital Economy, Isa Pantami,  

    This decision was made in accordance with the Presidential Review Committee on Excise Duty in the Digital Economy Sector’s recommendation. At a press conference, Pantami revealed that the proposed 5% excise levy on communications services would no longer be in effect.

    The development was welcomed by Pantami, the chairman of the presidential review committee established to examine the application of excise duty in the telecom sector.

    I’m pleased to inform you that President Muhammadu Buhari, GCFR, has authorised the exclusion of the digital economy sector from the requirement to pay a 5% excise duty. He spoke.

    Read also: Orange Group Prioritises Nigerian Telecommunications Market

    Speaking to journalists, Pantami said the decision was made as a result of a compelling argument made to him by the Committee members, who claimed that increasing the burden on the telecom sector would directly worsen the suffering of Nigerians. This strong argument led to the resolution that other sectors that are not contributing as much to the economy should be pushed to do more and pay the five percent excise duty.

    If the tax had been upheld, many businesses would have been affected, in his opinion.

    He stated, “Many MSMEs and SMEs depend on the sector for survival; the impact will take a toll on these businesses if the tax is increased.

    No need for excise duty for the telecom sector

    It is recalled that in July 2022, the Federal Government,  through the Minister of Finance Budget and National Planning, Zainab Ahmed, announced plans to implement a five per cent excise duty tax on telecom services in a bid to increase its revenue sources. 

    “The duty rate was not captured in the Act because it is the responsibility of the President to fix rates on excise duties and he has fixed five per cent for telecommunication services which include GSM. It is public knowledge that our revenue cannot run our financial obligations, so we are to shift our attention to non-oil revenue.” Finance minister had said.

    The communications minister said there was no need to do that, explaining that the telecoms sector was already paying 41 categories of taxes, levies, and charges, and any additional tax would affect Nigerians badly as the tax would be paid by the telecom consumers indirectly.

    “There is no need for excise duty in the telecom sector because the industry is already heavily taxed up to 41 taxes. The sector has been contributing hugely to Nigeria’s economy; more tax burden destroys the industry.” Pantami stated.

    “We increased revenue generated by 594 per cent from N51 billion quarterly to N481 billion quarterly. This is the only sector where the prices of services have been reduced. There is no justification for the government to impose more burden on its poor citizens.” He added.

    He assures that the tax exemption will be upheld by the incoming administration.

    Gambia Praises Nigeria on Telecom Regulation

    Telecoms subscribers sue FG 

    Telecommunication consumers under the aegis of the National Association of Telecoms Subscribers, NATCOMS, had sued the Federal Government in 2022 after the announcement from the finance minister to impose a 5% excise duty on telecoms services.

    The National President of NATCOMS, Adeolu Ogunbanjo, in February said that the association had filed a suit at the Federal High Court Ikoyi, challenging the government over the many taxes in the sector and increasing cost burden on telecom consumers.

    Ogunbanjo however, insisted that the consumer association would continue with its case in court until the government backed up its action with the law even though the Federal government announced the cancellation of the excise duty.

    “We cannot withdraw our case until the law is repealed or it has the backing of the law. They need to give it the backing of the law because even though he has said this, the new administration can introduce it again because they will be looking to increase revenue. So, until it is amended or repealed, we will still be in court.” Ogunbanjo stated.

  • Tanzania abolishes the mobile money tax

    Tanzania abolishes the mobile money tax

    With effect from October 1, 2022, forward, the Tanzanian government will no longer impose a charge on mobile money transfers. The decision to repeal the tax came about three months after the administration reduced the transfer charge by 43 per cent.

    In addition to removing the price for mobile money transfers, Tanzania will also remove the fee for bank transfers and will waive the transaction fee for cash withdrawals made through bank agents and ATMs for amounts that do not exceed 30,000 Tanzanian shillings (US$12.81).

    An East African country’s Minister of Finance and Planning, Mwigulu Nchemba, told the country’s Parliament that fees would no longer be charged for a number of financial transactions, such as moving money from bank accounts to mobile networks, moving money within the same bank, and moving money to and from other banks.

    The minister went on to say that the government is looking for ways to save money on things like conferences, training, refreshments, and tours so that it can make up for the money it will lose when taxes are taken away.

    The minister told Parliament, “We’ve decided to look at the taxes to make life easier for everyone, encourage cash transactions, and get rid of double taxation.”

    Read also: Tanzania China 5g Partnershipoosts-digital-economy

    The maximum levy currently stands at TZS4,000 (US$1.72), but with the cut, the maximum levy will be reduced to TZS2,000 (US $0.86). Nchemba also announced a reduction of mobile money transaction costs of 10% to 50%. The current maximum levy is TZS4,000 (US $1.72).

    A brief history of the Tanzanian levies

    Because the Tanzanian government wants its people to use mobile money services again, it has decided to lower the fees that come with mobile money transfers. When the government began collecting transaction charges in the fiscal years 2021 and 2022, people stopped making use of the services.

    In June 2021, Tanzania amended the Electronic and Postal Communication Act (CAP 306) by imposing a levy on mobile money transactions that ranged from TZS10 (US$0.043) to TZS10,000 (US$4.04), depending on the amount sent and withdrawn. This was done in order to raise revenue for the government.

    The tax was met with criticism, and as a result, a significant number of Tanzanians stopped using mobile money services. The Tanzanian government decided in September 2021 to reduce the levy by thirty per cent. In June of this year, the levy was reduced even lower to TZS4,000, which is equivalent to $1.72 USD.

    As a direct result of these tariffs, the financial health of phone companies has also been hurt. In Tanzania, mobile money and airtime recharge were hit with new taxes, which hurt Vodacom even though it had a lot of growth in the fintech sector in 2021.

    Nigeria suspends the new 5% value-added telecom tax

    Taxation of mobile money in Africa

    Several African countries are considering putting taxes on digital financial services (DFS) like mobile money, which are growing quickly.

    In January, Cameroon instituted a levy of 0.2% on all mobile money transactions. The Conversation says that Ghana put a 1.5% e-levy on mobile transactions in May. This tax is hurting the poorest people in the country the most.

    According to Zimbabwe Independent, since 2018, Ugandans have had to pay a mobile money tax of 0.5%, while beginning in 2019, Zimbabweans have been required to pay a whopping 2% charge, which is the highest tax rate when compared to other countries.