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Google Inc. and Facebook Inc. Quizzed by EU Lawmakers

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Google Inc. and Facebook Inc. were among U.S. companies facing questions Monday from European Union lawmakers about their tax-reducing techniques, a month after regional antitrust regulators raised the stakes by ordering Starbucks Corp. and a Fiat Chrysler Automobiles NV unit to repay millions of euros in back taxes.

The queries about the “Dutch Sandwich” and the “Double Irish” — tax arrangements that allow companies to declare income in lower-tax areas — came as the European Commission weighs its next decisions on fiscal pacts Amazon.com Inc. arranged with Luxembourg and Apple Inc. with Ireland. Eleven companies, including Amazon, faced questioning from the parliament’s special tax committee in Brussels.

“We make use of tax incentives and tax structures that are well known, widely accessible and are employed by virtually all multinational companies,” Google’s Nicklas Lundblad, senior director, public policy and government relations, told the parliamentary committee.

Elected officials have scrutinized the tax strategies of Google, Apple, Amazon, Starbucks, Microsoft Corp. and others, which have used the “Double Irish” and “Dutch Sandwich” to move foreign profits through Ireland and the Netherlands to Bermuda to avoid U.S. income taxes.

Such structures have “no impact on the amount of tax we pay across various European Union countries,” Lundblad said. “The entire Bermuda structure doesn’t erase any tax liability, it defers only U.S. tax.”

Facebook, which has its European base in Ireland, also has operations in the Netherlands in the form of a commercial office, and a legal entity in Luxembourg, said Delphine Reyre, the company’s director of public policy, southern Europe.

“There is no ‘Dutch Sandwich’ in this,” she told the lawmakers. She said has “no preferential fiscal tax treatment”  in Luxembourg.

An earlier hearing by the committee was scuttled when nearly all the corporate invitees declined to attend.

“Unfortunately we were unable to accept previous invitations to appear in respect of tax rulings, due to the fact that we’re part of an ongoing state aid investigation,” said Monique Meche, vice president of global public policy at Amazon. “That investigation remains open, and that’s why our comments, we’re limiting them to tax policy.”

Fiat, which declined the lawmakers’ invitation, and Starbucks last month were told to repay tens of millions of euros in back taxes in the first decisions from EU antitrust regulators on fiscal deals that allowed companies to avoid taxes. After facing criticism by British lawmakers and activist groups, Starbucks last year announced it would move its European base to London from Amsterdam and increase the amount of tax it pays in the U.K.

Google and Amazon were also targeted in U.K. Parliament hearings in late 2012 to 2013 on corporate tax dodging and tactics used by information-technology companies and others. The U.S. Senate has also looked into Apple Inc.’s offshore tax policies. The companies all say they’ve complied with international tax laws.

The European Parliament’s probe, which is separate from the regulatory inquiry by the European Commission, started in February, after documents leaked by a group of investigative journalists showed that Luxembourg alone struck hundreds of secret fiscal deals known as tax rulings with companies from around the world, including PepsiCo Inc. and The Walt Disney Co.

Disney, Coca-Cola Co., and Anheuser-Busch InBev NV, HSBC Holdings Plc, Ikea Group and Philip Morris International Inc. also faced questions Monday, with Wal-Mart Stores Inc. declining to appear.

 

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Telecoms ‘Will be The Fastest Growing African Business Sector’

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The telecoms sector will be the fastest-growing industry in Africa over the next five years as internet connectivity improves, new research with business leaders for blockchain-based mobile network operator World Mobile shows.

When asked to pick the three sectors that they believe will see the strongest growth over the next five years, three out of four (75%) senior executives selected telecoms in the study.

It was comfortably ahead of the healthcare sector which emerged as the second choice selected by 61% of survey respondents as one of three industries that will see the strongest growth ahead of tourism at 44%

Senior executives at companies with combined annual revenues of more than $6.75 billion based in Tanzania, Angola, Botswana, Cameroon, Ethiopia, Ghana, Nigeria, and South Africa were interviewed for the study.

Improvement in internet connectivity was identified as central to growth in the economy and across all sectors. Around two-thirds (66%) say it is important while 20% believe it is very important. The table below shows which sectors senior business executives believe will be the fastest-growing over the next five years.

SECTOR HOW MANY EXECUTIVES BELIEVE IT WILL BE ONE OF THE TOP THREE FASTEST GROWING SECTORS IN AFRICA OVER THE NEXT FIVE YEARS
Telecoms 75%
Healthcare 61%
Tourism 44%
Financial services 36%
Retail 36%
Manufacturing 22%
Education 22%

World Mobile is helping to revolutionise internet connectivity in sub-Saharan Africa and is already working with the government in Zanzibar where it is launching a unique hybrid mobile network delivering connectivity supported by low altitude platform balloons.

Its blockchain-based network vastly reduces capital expenditure and cuts costs compared to traditional telecom operators. World Mobile is in discussions to expand in Tanzania and Kenya, as well as other territories underserviced by traditional mobile operators.

Micky Watkins, CEO of World Mobile said: “The expansion of telecoms across the African continent is central to driving economic growth and senior business executives clearly agree as they rank it well ahead of other major sectors of the economy.”

“To a great extent, growth in telecoms spurs growth in other sectors as societies become more digital and technology focused and that applies very much to financial services, healthcare, retail and education.”

“Not all parts of Africa however have strong internet connectivity and we want to help by providing a service which is affordable and reliable and look forward to working with governments across the continent.”

World Mobile’s balloons will be the first to officially launch in Africa for commercial use, offering a more cost-effective way to provide digital connection to people and is the first step in its mission to help bring nearly four billion people online before 2030 in line with the UN and World Bank’s SDGs.

The World Mobile approach is more sustainable, in environmental, social and governance terms. Environmental impacts are mitigated using solar-powered nodes, second-life batteries, and energy-efficient technology. World Mobile creates a positive societal impact through the application of its circular economy model – a “sharing economy” where locals share in the ownership and rewards of the network.

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Financial Inclusion: ZirooPay Targets Deeper Mobile POS Penetration in Nigeria

Nigeria’s retail Point-of-Sale solution provider, ZirooPay has embarked on an aggressive drive to deepen the penetration of its unique mobile POS assets.

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Omoniyi Olawale

In a bid to boost market share while driving financial inclusion by penetrating the underbanked market through its proprietary mobile POS technology, Nigeria’s retail Point-of-Sale solution provider, ZirooPay has embarked on an aggressive drive to deepen the penetration of its unique mobile POS assets.

Over the next months, ZirooPay hopes to grow its network of mobile POS around Nigeria by adding no fewer than 20,000 mobile POS, on the heels of a successful funding round, which has positioned it to tap into the growing opportunities in Africa’s retail sector.

Recall that ZirooPay is reputed for a patent of a unique and efficient mobile POS technology that enables small businesses to process card payments in real-time, even when there is no internet/data connection, strategically positioning it to drive financial inclusion in a country that has achieved only 63 per cent financial inclusion and 33.6 per cent of broadband penetration.

ZirooPay’s payments solution is fast, simple and reliable, delivering a 95 per cent transaction success rate for POS transactions compared to the industry’s average of 25 – 50 per cent.  The solution leverages its unique and patented internet-free technology, to enable SMEs (across the retail, agency banking, hospitality and services sectors) to process in-person payments, track their sales, and manage their businesses from their mobile devices.

Beyond payments, ZirooPay also provides merchants with automated sales history, sales analytics, and inventory tracking to help them monitor and manage their businesses more efficiently. ZirooPay’s superior transaction success rate and the integrated nature of its service stand it out from the competition.

The payment provider, which started operations in Nigeria in 2019, has organically grown to 15,000 merchants processing over $500m in 10m transactions and looks to replicate this success across Africa.

Speaking recently, the Chief Executive Officer, CEO of ZirooPay, Omoniyi Olawale said this is part of several initiatives aimed at empowering more SMEs to take effective control of their businesses, adding that the firm is committed to deepening access to ZirooPay’s invaluable payment services for all sizes of retail business both in rural and urban centres in Africa.

He explained that innovative payment solutions such as ZirooPay will remain an imperative as wholesale and retail sectors continue to dominate Africa’s contribution to its GDP, even as population growth and rapid urbanisation continue to drive consumption across the continent.

He said, “ZirooPay has set out to build an operating system for retail in Africa by providing solutions that not only drive financial inclusion but also support the payment infrastructure needed for retail to thrive on the continent. Lack of reliable payment technology for the continent remains one of the major challenges that has hindered trade tremendously and ZirooPay Mobile POS solution will address this challenge.”

According to Omoniyi, while it is still early days for payments in Africa, ZirooPay understands the peculiarities of the continent’s infrastructure challenges and would continue to advance similar innovative solutions that will address the payment challenge on the continent on a sustainable basis.

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Nigeria Approves Microsoft Agreement, Others to Accelerate 5G Deployment

In a move to accelerate the deployment of 5G services, the Federal Government has approved Enterprise Licensing Agreement for Microsoft products and clearing up of the C-band spectrum.

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In a move to accelerate the deployment of 5G services, the Federal Government has approved Enterprise Licensing Agreement for Microsoft products and clearing up of the C-band spectrum.

The approval was after Isa Pantami, the Minister of Communications and Digital Economy presented three memos to the Federal Executive Council (FEC) on June 29, 2022.

Femi Adeluyi, the Technical Assistant (Research and Development) to the Minister of Communications and Digital Economy, disclosed in a statement issued after the approval.

The Government-wide Enterprise Licensing Agreement for Microsoft products will help reduce the cost of information technology projects, while the C-band migration is expected to aid the deployment of the 5G network.

Explaining the benefits of the agreements, Adeluyi said “The Agreement will give the government access to discounted prices and other cost benefits, as well as reduce project duplication across Federal Public Institutions (FPIs).

“It will also guarantee proper technical support for Microsoft products and services, thereby ensuring protection against cybersecurity threats, which will guarantee availability and reliability of government IT services.

“The Enterprise Licensing Agreement will provide a projected savings of a minimum of 35% of Governments current investment in Microsoft Products and Services.

“This will not only substantially reduce the cost of license procurement for FPIs, it will reduce and simplify licensing complexity, facilitate accounting and cash flow predictability and monitor utilisation and impact of Government investment.”

The statement added that the Federal Executive Council has directed all Federal Public Institutions to start taking advantage of the agreement by using Microsoft licenses and services.

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