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FIRS Sets January 2020 for Online VAT Deduction

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  • FIRS Sets January 2020 for Online VAT Deduction

The Federal Inland Revenue Service (FIRS) insisted on imposing 5 percent Value Added Tax (VAT) on online transactions despite experts saying it will hurt e-commerce growth in the country.

The Chairman, FIRS, Mr Tunde Fowler, who was attending the African Tax Administration Forum Technical Workshop on VAT, disclosed this in on Monday in Abuja.

Fowler explained that countries and businesses have identified Nigeria as a growing e-commerce market, therefore, it is important to start generating revenue from the sector.

“We have thrown it out to Nigerians. Effective from January 2020, we will ask banks to charge VAT on online transactions, both domestic and international.

“VAT remains the cash cow in most African countries, with an average VAT-to-total tax revenue rate of 31 per cent. This is higher than the Organisation for Economic Cooperation and Development’s average of 20 per cent.

“This statistics, therefore, is a validation of the need for us to streamline the administration of this tax with the full knowledge of its potential contributions to national budgets.

“It is, however, also bearing in mind the rights of our taxpayers,” he said.

According to him, tax is imperative to the economy, especially as a source of funding for capital expenditure in a nation like Nigeria.

“VAT revenue is shared 15 per cent to the Federal Government, 50 per cent to state governments and 35 per cent to local governments.

“FIRS wrote to all commercial banks in May 2018, requesting for a list of companies, partnerships and enterprises with a banking turnover of N1 billion and above.

“This activity is aimed at ascertaining those companies that are compliant with the tax laws and those that are not,” he said.

Since the FIRS first announced its intention to tax online transactions, experts across the nation have said the industry is not ripe enough for such decision as most of these businesses are still raising funds amid huge losses.

Jumia shares have been following since it listed on the New York Stock Exchange in April, other e-commerce sites like Konga are yet to record enough growth to withstand a possible drop in sales as customers are simply expected to start buying from shops or apply for a free prepaid card from the US or UK. The cards are available free online and can be funded easily.

Fowler, however, said the date of commencement is subjected to government approval. We can only hope Buhari won’t approve it comes January 2020.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

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Fintech Companies Raised $554 Million in Investment Last Week

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Financial Technology Firms Raised $554 Million Investment Capital Last Week

Financial Technology (Fintech) companies raised a combined $554.17 million from investment rounds last week.

A data compiled by Finbold showed the top 25 fintech firms were led by Razorpay and Wealthsimple.

Razorpay, a payment platform, raised $100 million to account for 18.04 percent of the total amount raised during the week. This was followed by Wealthsimple’s $87 million.

Deepwatch came third with $53 million while NYDIG and M1 Finance came fourth and fifth with $50 million and $45 million, respectively.

Other noteable fintechs include Extend $40 million; FOSSA $30.55 million; +Simple $23.75 million; Finexio $23 million; and Sonrai Security $20 million.

On the other hand, Evolve Credit was the last among the 25 companies. It raised $0.025 million while Upside Saving raised the second least fund at $0.42 million. Also, they were the two firms that raised below $1 million in the week under review.

Oliver Scott, a Finbold editor, who spoke on funding in the fintech sector, said “Notably, venture capital is still the primary source of funding for fintech startups. However, new trends indicate a high level of private equity and debt financing. Additionally, more funding activity is concentrated around later funding rounds. The sector is also witnessing a rise in IPOs and acquisitions. Such trends are pointing to a maturing market.”

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Snapchat Adds 39 Million Daily Active Users YoY Representing 18% Growth

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Snapchat Daily Users Increase by 39 Million YoY, a 18 Percent Increase

Data presented by Buy Shares indicates that Snapchat daily active users have grown by 39 million on a Year-Over- Year basis. The addition represents a growth of 18.57%.

Pandemic spurs Snapchat’s DAU growth

During Q3 2019 the daily active users stood at 210 million while the figure was 249 million as of Q3 2020. Between Q3 2018 and Q3 2020 Snapchat’s daily active users have grown by 33.87%.

After witnessing a rise in daily active users the numer slumped between Q1 2018 and Q4 2018 with a percentage drop of 2.61%.

The research also overviewed Snapchat’s number of daily active users based on regions. As of Q3 2020, North America recorded the highest number at 90 million, a growth of about 7% from a similar period last year.

Commenting on the recent surge in Snapchat’s daily active users, Buy Shares researcher Justinas Baltrusaitis said:

After taking a dip in users around 2018 Snapchat began witnessing a steady rise from the end of last year. The platform’s 2020 numbers have been boosted by the coronavirus pandemic.During the health crisis, most people were confined to their homes and turned to social platforms like Snapchat for entertainment.”

Europe has 72 million active daily users as of Q3 2020, a growth of 10% from Q3 2019. Elsewhere during Q3, 2020 the rest of the world had 87 million daily active users.

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UK Imposed €132.7 Million of GDPR Fines, more than Germany and Italy Combined

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UK Imposed €132.7 Million of GDPR Fines, more than Germany and Italy Combined

The General Data Protection Regulation (GDPR) continues causing hefty fines and penalties for businesses and organizations across European countries even two years after coming into force.

According to data presented by Buy Shares, the United Kingdom tops the list of the most expensive data breach penalties with €132.7 million in total value of GDPR fines, more than German and Italy combined.

Cumulative Value of GDPR Fines Hit €344 Million, a €119 Million Increase in 2020

The primary reason for such a high cumulative value of GDPR fines in the United Kingdom is the data breach penalty imposed by the UK’s data protection authority, ICO, to Marriott International. In November 2018, the American multinational company was fined with €110.4 million after reporting a cyber incident that exposed nearly 340 million guest records.

Last week, the ICO fined British Airways €22 million for failing to protect the personal and financial details of more than 400,000 of its customers, the second-largest GDPR fine in the United Kingdom. The penalty is considerably smaller than the €204.6 million that the ICO initially said it intended to issue back in 2019 after the Magecart group used card skimming to collect the personal and payment information of British Airways` customers.

Far below the United Kingdom, Germany ranked as the second-leading country in Europe with €61.6 million in the cumulative value of GDPR fines, revealed the GDPR Enforcement Tracker data. On October 1st, 2020, H&M Hennes & Mauritz Online Shop was fined with €35.2 million for the insufficient legal basis for data processing, the severest GDPR penalty in the country.

Italian data protection authority (Garante) imposed €57.3 million worth of GDPR fines so far, ranking in third place among European countries. On January 15th, 2020, telecommunications operator TIM was fined €27.8 million for unlawful data processing, non-compliant aggressive marketing strategy, and invalid collection of consents, the steepest penalty in Italy.

France ranked fourth among the European countries with €51.3 million worth of GDPR fines. Austria, Sweden, and Spain follow, with, €18 million, €7million, and €3.9 million, respectively.

Statistics indicate the cumulative value of GDPR fines and penalties hit over €344 million in October, with almost €119 million worth of new fines imposed in 2020.

Top Five GDPR Penalties Account for 70% of Cumulative Fine Value

Behind Marriott’s €110.4 million worth GDPR fine, Google holds second place on the list of the highest data breach penalties. The US tech giant was fined €50 million by France’s data protection regulator, CNIL, for not providing enough information to users about its data consent policies and control in using their data.

H&M Hennes & Mauritz Online Shop ranked third on this list with €35.2 million worth GDPR fine. Italian telecommunications operator TIM and British Airways round the top five list with €27.8 million and €22 million, respectively.

Statistics show the five biggest data breach penalties cost more than €245 million, or 70% of cumulative GDPR fine value.

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