Nigeria's communication commission sets up new department for digital taxes
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Nigeria is moving its implementation of digital taxes forward
in partnership with FLUTTERWAVE 09.07.2020
Hi there, Welcome to TC Daily! In today's digest: Nigeria is taking its next step towards collecting digital taxes, Twitter is considering a paid subscription and we have a brand new Femtech segment. Please take a moment to subscribe to our newsletter if this email was forwarded to you.
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DIGITAL TAXES
In 2016, the global digital economy was worth about $11.5 Trillion. That's an impressive 15% of the world's GDP in 2016. In 2026, that figure is expected to be 25%. Governments all over the world want a share of the revenue through taxes. For a long time, companies like Facebook and Google have been able to avoid paying taxes in many countries because they might not have physical offices there. But as these companies are changing the world, governments are adapting tax laws to include them in the tax brackets. In Africa, Angola and South Africa are two countries with existing digital tax laws. Angola has a 14% VAT for all digital sales and mandates digital service providers to register for VAT immediately they have their first Angolan customer. In South Africa, it's a little different, with a threshold of ZAR 1000,000 before VAT registration is required. Now, Nigeria and Kenya are jumping in on the action, with Kenya's Revenue Authority (KRA) setting up a new unit to track all digital transactions. Nigeria, which passed its finance act almost at the same time with Kenya is also catching up to speed. According to Technext: "Nigerian Communications Commission (NCC) has created a Digital Economy Department, principally responsible for implementing programmes and policies aimed at fully supporting and promoting the national digital economy agenda of the Federal Government." Nigeria's decision to move ahead with its digital tax plans is hardly surprising but it will be disappointing for the OECD, a body Nigeria is a member of. The OECD has been working on an inclusive framework to address digital tax challenges since 2019. The OECD Secretary-General, Angel Gurria rightly predicted last year that ”failure to reach agreement by 2020 would greatly increase the risk that countries will act unilaterally, with negative consequences on an already fragile global economy. We must not allow that to happen.”
TWITTER

"How is this app free?" is a question quite a few Twitter users have asked once or twice in the last few years. It looks like Twitter has been listening. A recently posted job listing which has now been deleted reveals that Twitter is working on a subscription service code named "Gryphon." It will not be the first time that the company is considering a paid subscription service, with The Verge reporting on one such attempt in 2017.

TECHCABAL LIVE
Our next TechCabal Live session holds on Friday, July 10 at 11 am and this time we are having Omowale David-Ashiru, Vice President - Global Operations at Andela. The global tech talent provider recently pivoted to a fully remote model and has had to make tough decisions in the middle of the pandemic. Omowale's team is responsible for creating an environment that fosters effective work for its fully remote workforce across seven countries with unit economics that is viable for sustained growth and scaling of the company. She will answer questions about how Andela is navigating the crisis and will share lessons for business leaders. Register here to join the session.
FEMTECH
The term "femtech" was coined in 2016, to refer to that section of products, services or software which use technology often to focus on women's health. Kay Ugwuede writes the first piece for our Femtech segment with a focus on FemConnect, a South African femtech startup is matchmaking potential donors to girls in disadvantaged communities. Here's an excerpt from her article: "In South Africa, more than 60% of the adult female population have access to free contraceptives from its public healthcare institutions. It is one of the highests on the continent in terms of prevalence of contraceptive care and use by women. But there is a snag; a very narrow range of options to choose from."
FUNDING
Quite a few observers predicted a slowdown in funding activity on the African continent. Most of these predictions were thanks to a global pandemic that has left world leaders in sixes and sevens. Despite the disarray, the total funding for African startups in 2020 has now passed the $500m mark. This is according to a new report from Techpoint and they are careful to state that this report considers only fund raises of $1 million or more. In Q1 2020, 35 African startups raised over $340 million. The top three countries where most of the activity happened are South Africa, Nigeria and Egypt. Unsurprisingly, the figures for Q2 2020 are dismal in comparison with startups raising only $28m in March.
AFRICAN EXITS

Last week, the Johannesburg-based payments company MFS Africa acquired Beyonic, an East Africa-based fintech company. It was the ideal situation for co-founders Dan Kleinbaum and Luke Kyohere after eight years of building and running the company. A lot is said about how Africa needs more exits and Dan and Luke sat down with Disrupt Africa to share their story of an African exit.
Their story is worth a read and here's an interesting excerpt from their conversation: "Building things is hard. Doing it early, in markets where traditional venture investments hadn’t yet paid off, and being constantly hamstrung by a lack of resources is ludicrously difficult. We took more risks than we intended, made more mistakes than I care to admit, one of our founders (me) quit, and we hit obstacles that felt insurmountable enough we thought we were going to shut the company down just about every year."

WHAT ELSE IS HAPPENING?
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- Olumuyiwa

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