Google, Netflix, Facebook, and other foreign tech giants have significantly bolstered Nigeria’s revenue coffers, contributing N1.98tn in taxes over the course of 15 months.
This figure encompasses both Company Income Tax (CIT) and Value Added Tax (VAT) as per data sourced from the National Bureau of Statistics.
CIT, a 30 percent tax imposed on companies’ profits, and VAT, a 7.5 percent consumption tax levied on goods and services purchased and consumed by the end-user, have been instrumental in swelling the government’s revenue.
In 2020, there were reports of the Federal Government’s intentions to tax foreign digital service providers that offer services to Nigerian citizens and generate revenue in Naira.
These digital service providers, which include video streaming platforms, social media networks, and companies offering digital content downloads, are now required to pay digital taxes to the Federal Inland Revenue Service.
The former Minister of Finance, Zainab Ahmed, had issued the Companies Income Tax (Significant Economic Presence) Order, 2020, as an amendment to the Finance Act 2019.
This order was devised to impose taxes on foreign entities that have a Significant Economic Presence in Nigeria, particularly those offering digital video and advertising services to Nigerians.
Companies such as Alibaba and Amazon, which generate revenue from Nigeria through data processing, the provision of goods and services via digital platforms, or offering intermediary services that link suppliers and customers within Nigeria, are also subject to these regulations.
The new regulations apply to companies with annual incomes of N25 million or the equivalent in other currencies from Nigeria, as well as those with a Nigerian domain name (.ng) or a website address within the country.
Under the SEP order, foreign companies that interact extensively with individuals in Nigeria, customize their digital platforms to target Nigerians by pricing their products or services in Naira, are obligated to pay taxes.
However, certain exemptions apply, including payments made to employees of foreign entities and payments for educational services.
In January 2022, the Federal Government revealed plans to impose a six percent tax on the turnover of offshore companies providing digital services to local customers in Nigeria, in accordance with the 2021 Finance Act.
Regarding the taxation of digital services, former Finance Minister Ahmed clarified that this includes apps, high-frequency trading, electronic data storage, and online advertising, emphasizing that the policy introduces turnover tax on a fair and reasonable basis.
Section 30 of the Finance Act, which amended Sections 10, 31, and 14 concerning VAT obligations for non-resident digital companies, incorporates this policy.
Ahmed elaborated that the government aims to modernize taxation for the digital economy and enhance compliance. Non-resident digital companies are now required to pay a six percent tax on their turnover.
These companies do not need local registration but must cooperate with the Federal Inland Revenue Service (FIRS) to collect and remit taxes, reducing the compliance burden.
However, experts at PricewaterhouseCoopers raised concerns about enforcement, especially for companies located beyond the FIRS’s territorial jurisdiction. They highlighted that Nigerian resident businesses dealing with these foreign companies might be required to account for withholding tax on payments made to them.
Behind Closed Doors: Microsoft’s Bid to Make Bing Apple’s Default Search Engine
Insiders have disclosed that Microsoft Corp. engaged in discussions with Apple Inc. around 2020 about potentially selling its Bing search engine.
The proposed deal aimed to replace Google as the default search engine on Apple devices, particularly iPhones.
People familiar with the matter, who chose to remain anonymous, disclosed that high-level executives from Microsoft held exploratory talks with Eddy Cue, Apple’s services chief, responsible for the existing search engine partnership with Google.
Despite these discussions, the deal never progressed beyond preliminary stages. This revelation has gained renewed attention in light of the ongoing U.S. Department of Justice antitrust trial against Google, in which Apple and Microsoft are actively involved. The Justice Department is using Apple’s arrangement with Google as evidence of Google’s search market dominance.
Apple’s Eddy Cue defended the collaboration during his trial testimony, asserting that Google was the superior search option, emphasizing the quality of Google’s technology.
Apple’s partnership with Google, initiated in 2002, had grown to become highly lucrative, earning Apple between $4 billion to $7 billion annually by 2020.
This financial aspect, coupled with concerns about Bing’s competitiveness, played pivotal roles in Apple’s ultimate decision not to acquire Bing.
While Bing was briefly used as the default search engine in some Apple features between 2013 and 2017, including Siri and Spotlight, Google ultimately remained the preferred choice. In court, it was revealed that Microsoft had considered a multi-billion-dollar investment in its relationship with Apple in 2016, but this attempt was unsuccessful.
Eddy Cue’s testimony underscored Apple’s belief that Google’s search technology was unmatched, signaling that Apple had no plans to develop its own search tool.
This differs from Apple’s approach in other areas, where it competes directly with Google in mapping software, voice assistants, and operating systems.
In retrospect, Apple’s dalliance with Bing serves as a fascinating chapter in the tech giants’ intricate web of partnerships and rivalries.
iPhone 15 Pro and Pro Max Owners Complain of Overheating Issues
Some of the first owners of Apple Inc.’s latest offerings, the iPhone 15 Pro and Pro Max, are feeling the heat – literally.
Reports are pouring in from frustrated customers who claim that their new devices are prone to overheating during usage and charging, casting a shadow over Apple’s flagship product.
Complaints have flooded Apple forums and social media platforms, with users expressing concern over the device becoming uncomfortably warm while gaming, making phone calls, or using FaceTime.
The issue appears to be exacerbated when the phone is plugged in for charging.
Apple’s technical support staff have been inundated with calls on the matter and have been directing customers to an older support article on managing hot or cold iPhones.
This notice suggests that overheating may occur during intensive app use, charging, or initial device setup.
Apple, headquartered in Cupertino, California, has remained tight-lipped regarding these complaints, leaving users speculating about the root cause of the issue.
As the iPhone accounts for a substantial portion of Apple’s revenue, any product flaws are scrutinized intensely. While some problems can be resolved through software updates, others may fade with time. Apple usually subjects its products to rigorous testing to catch potential pitfalls before mass production.
The overheating issue could be related to the iPhone setup process, which can be processor-intensive, particularly when re-downloading apps and data from iCloud.
Users have also suggested that certain background apps, such as Instagram or Uber, might exacerbate the problem.
Videos of users measuring the phone’s temperature with thermometers have surfaced online, with one user reporting, “iPhone 15 Pro Max gets really hot easily.”
However, it’s not a universal problem, as some users have reported no issues or found that using a protective case mitigated the heat.
This development follows recent complaints about the FineWoven material used in iPhone 15 cases, highlighting potential quality concerns with Apple’s latest product offerings.
TikTok Faces Regulatory Storm in Indonesia as Minister Calls for E-commerce Split
Teten Masduki, the Indonesian Minister of Cooperatives and Small and Medium Enterprises, has emerged as a vocal critic of the Chinese-owned social media giant TikTok.
Masduki’s relentless complaints about TikTok’s dominance in the Indonesian e-commerce market have set the stage for a seismic regulatory shift that could have far-reaching consequences.
Masduki, a former activist who once took on government corruption, has been disrupting official meetings to raise concerns about TikTok’s impact on local players. This groundswell of criticism has culminated in sweeping regulations that force TikTok to split payments from shopping in Indonesia, a move seen as a significant blow to TikTok’s e-commerce aspirations.
Under these new rules, social media companies in Indonesia are barred from handling direct payments for online purchases, effectively requiring TikTok to either create a separate app for payments or risk being shuttered in Indonesia entirely.
The regulations, stricter than anticipated, have already had a chilling effect on the e-commerce market, benefiting local champions like GoTo and Sea.
While TikTok has pushed back, arguing that the separation of social media and e-commerce hampers innovation, the Indonesian government remains firm in its stance, aiming to protect smaller enterprises and voters as elections loom on the horizon.
This clash underscores the challenges TikTok faces in its pursuit of e-commerce dominance and sets a precedent for other countries in the region. As TikTok’s meteoric rise in regional e-commerce continues, governments are increasingly assessing whether the platform benefits or harms domestic merchants.
For TikTok, the challenge lies in finding a solution that appeases authorities while allowing it to continue its growth. The repercussions of this battle in Indonesia could reverberate throughout Southeast Asia and beyond, shaping the future of social media-driven e-commerce.
In a rapidly evolving digital landscape, Teten Masduki’s bold stance against TikTok may just be the opening salvo in a much larger struggle for control of the e-commerce arena.
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