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Like Nigeria and Zimbabwe, Rwanda wants to tax digital companies like Netflix, Google, YouTube …

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Rwanda has joined a list of African countries like Nigeria and Zimbabwe who have announced plans to tax online services and digital companies consumed within the country.

Earlier this week, the Federal Government of Nigeria announced plans to tax foreign digital service providers offering services such as Netflix, Google, YouTube, and Amazon.

Some of these service providers are video streaming sites, social media platforms, and companies that offer downloads of digital content. They are expected to pay digital tax to the Federal Inland Revenue Service.

The principle that allows international tax and cross-border activities was designed after the need for industrialization post WW11 in the 1920s and known as permanent establishment (PE) status.

The principle requires that a business only be taxed in a country where it creates sufficient physical presence. Since most companies in the digital economy can operate in a country without setting up appearances, the rule does not capture them.

 

image culled from qz.com

 

According to the Rwanda Revenue Authority (RRA), a proposal has been presented before the Ministry of Finance and Economic Planning from where it will undergo several procedures before implementation if approved.

“When you pay for services such as Netflix, you are using money that you have generated in Rwanda. So, we are asking, why don’t we collect VAT on these services yet they are being paid for by our citizens? If you pay 12 dollars a month for Netflix, why don’t we keep some of that amount at the source here?” Jean-Louis Kaliningondo, the Deputy Commissioner General of RRA said.

“If you go to Western countries, for example, France, you find that Amazon pays VAT yet it is not a French company. European countries are collecting VAT on services provided by foreign platforms, he added.

In November 2021, Ghana announced plan to introduce 1.75% levy on all electronic transactions including on mobile money payments, bank transfers and merchant payments to widen the tax net.

A number of African countries have expanded the scope of their indirect taxes to cover digital services, but only a few have thus far implemented some form of direct digital services tax that applies to non-residents with no physical presence in their respective countries.

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Egyptian supply chain startup, OneOrder, secures $3 million funding to scale up expansion plans

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An Egyptian supply chain solutions startup, OneOrder, has successfully raised $3 million in seed to enable it achieve its aim of expanding beyond the MENA region, the company’s cofounder and CEO, Tamer Amer, announced on Tuesday.

According to Amer, the funding was led by angel investor, Nclude with participation from Delivery Hero Venture and A15.

The company which was in 2021, enables restaurants to order food supplies directly on its platform, thereby helping to tackle shortages, price fluctuations, product consistency and accurate delivery.

“As a startup, OneOrder is able to improve such efficiencies across the supply chain by using its proprietary technology, which helps ensure product availability, as well as fast and accurate fulfillment,” Amer said.

“By using the platform, restaurants can order supplies for next-day delivery, eliminating the need to pay for additional storage and warehousing costs, as well as cutting costs by leveraging OneOrder’s economies of scale,” he added.

The company has so far raised $7.5 million since its launch last year. The latest round of funding, according to Amer, will also be used to “expand the team, invest in its proprietary technology, and grow the startup’s warehouse footprint across Egypt and the MENA region.”

“As a restaurateur myself, I have witnessed first hand the avoidable overheads and hassles HoReCa businesses go through in serving their customers.

“We are delighted by the level of adoption and growth we have recorded over the past year which is a testament to the fact that we are addressing a huge unmet demand in our region,” he added.

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Kenyan asset recovery agency drops fraud charges against Nigerian fintech startup, Kora

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Kenyan Asset Recovery Agency (ARA), on Monday, withdrew fraud and money laundering charges it had filed against against Nigerian fintech startup, Kora.

The charges against the Nigerian startup by the Kenyan agency were filed in July following accusations of money laundering and card fraud in the eastern African country, with the ARA going further to freeze the accounts of the company.

However, new court documents released on Monday show that the ARA has filed a notice of withdrawal of the charges at the High Court of Kenya at Nairobi Anti-Corruption and Economic Crimes Division.

In the document which was filed by state counsel, Stephen Githinji, on behalf of ARA director, the agency said that it had withdrawn its suit in its entirety.

Another document issued by the Kenyan Directorate of Criminal Investigation (DCIA), also confirmed that the agency has cleared Kora of any wrongdoing.

“Please note that investigations are now finalised. I would like to confirm that allegations of money laundering and card fraud against [Kora] were not established. Please treat this communication as final,” the DCI report said.

Kora’s Chief Operations Officer, Gideon Orovwiroro, in a statement, also confirmed the development.

“Kora has always maintained its innocence in this matter and we are glad that finally the ARA and the DCI have dropped all charges and ratified Kora.

“We’d also like to commend both agencies for their professionalism and thoroughness in seeing this investigation to the conclusive end,” says

“We are delighted to get back to building the most robust payment product on the African continent. We have some exciting announcements coming soon, including multi-currency bank account products for African businesses.

“This will empower merchants to have bank accounts in GBP, EUR, USD and other in-demand currencies. Kora is excited about this development as it is further proof of its commitment to enrich the quality of merchants’ payments and build more meaningful financial products.”

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