After nearly seven decades of oil exploration in the Niger Delta, the Nigerian oil industry now makes up 65% of government revenue and 88% of foreign exchange earnings. But this oil wealth has come at a terrible cost to the local people and their environment.

Decades of oil spills and gas flaring have transformed the Niger Delta into one of the most polluted places on Earth. About 300 oil spills occur in the region each year and in 2011, a spill at Shell’s Bonga oil fields released 40,000 barrels. Over 350 farming communities were affected, and 30,000 fishermen were forced to abandon their livelihoods.

Although local people are supposed to be compensated for oil spills caused by technical failures, this rarely happens because of a flawed process for determining the cause of spills. The 6.5 million local people whose livelihoods depend on fishing, and many others who survive on farming, have watched their futures drain away with the oil.

Faced with increasingly desperate prospects, many young men in the Niger Delta have turned to militant violence. When I’ve discussed my research on the experiences of young people in this region with friends and strangers, many have been quick to question my decision to focus on the grievances of violent young men. I have never felt that criminality is the only explanation for militancy. Instead, I wanted to shine a light on the experience of local young men to help tell the story of this exploited part of the world.

Where exclusion and violence collide

In a country where many young people are unemployed, feelings of economic exclusion are common. But for young men in the Niger Delta, unemployment is one problem among many.

The culture in which young men are raised expects them to marry and to become providers. But marriage is often an elaborate process in Nigeria that requires lots of money. For many young men lacking modern jobs and the ability to farm and fish, marriage is simply too expensive. “We are the head of the house, but we cannot control the house” is a popular analogy that I often heard said.

United by shared grievances, young men began launching attacks against the oil industry in 2003, torching pipelines, kidnapping oil workers for ransom and killing soldiers deployed to protect oil facilities. Politicians also found a way to use militants by paying them to terrorise opponents and help win elections.

In 2004 alone, over 100 people died in violent clashes between rival militant groups and security forces. By early 2007, oil production had fallen by 40%, forcing the federal government to launch the Amnesty programme two years later which offered young men monthly payments of US$400 (£318) and development projects in return for dropping their weapons.

 

But many of these projects – including oil contracts – were awarded to militant leaders. Many more young men became militants because of this programme and the lucrative settlements it offered. Through violence, they were able to insert themselves into the oil economy through the back door.

Finding a future

Aside from turning to violence, young men in the Niger Delta are responding to their experiences of environmental harm in different ways. Some have become activists, demanding improved regulations and campaigning for their polluted land to be restored. Others are asking for modern jobs in the oil industry to compensate for the rural livelihoods they’ve lost. Those with the means to travel are migrating to cities in search of a better life.

But for Ken, a young man from Bodo village, travelling is not an option. Township life is hard, he says, but he is deeply attached to his native home. He likes the mangrove forests. He enjoys watching the dances by women in his community. He likes the friendliness of the villagers, and relishes his wife’s soup made with periwinkles and freshly plucked vegetables from their backyard. He enjoys rural life and doesn’t want to leave.

Transforming the lives of local residents will require radical changes, starting with how the region’s oil money is spent. Young men from the communities most affected by pollution shouldn’t be passive recipients of oil revenue who are only brought into the oil economy when they resort to violence.

While money remains a big concern, my research indicates that many local people would rather have a healthy natural environment than financial rewards from oil companies. Despite near constant protests against pollution, and the UN Environment Programme’s call for immediate remediation of contaminated lands and rivers, not a lot has improved in the last decade. The hope of a better life is waning for many, and most of the young men I spoke to are convinced that oil has meddled with their destiny.

 

Modesta Tochi Alozie, Researcher at the Urban Insititute, University of Sheffield, University of Sheffield

This article is republished from The Conversation under a Creative Commons license. Read the original article.

StarTimes, a Pay-TV provider, has reaffirmed subscription affordability through the pay-as-you-go model as it adds new offerings.

The new contents to be offered by the company include Toonami, Ceebies, ST School Junior, ST School Senior, Human Right, Dunamis, Love Nature, Smithsonian, Colors TV, Sky News, Tiwa ‘n’ Tiwa, Filmbox and more.

Speaking during a virtual conference meeting, Marketing Manager of StarTimes, Viki Liu, who was represented by the Public Relations Manager, Mr. Lazarus Ibeabuchi said that subscribers can still adopt the pay-as-you-go model with the introduction of the Nova bouquet for N900($2.32).

“To bring these exciting offerings within the reach of every Nigerian, Liu said: “As entertainment provider we pioneered and remains the only player in the Nigerian market offering flexible subscription options allowing Nigerians to subscribe according to their needs and means.”

She noted that the pay-as-you-go options are available for all bouquets; and whether a customer subscribes daily, weekly or monthly to a bouquet, the subscriber will have access to the same channels and services, adding that flexible billing systems are reasonable for people who do not spend reasonable time watching television after subscription.

According to her, “due to StarTimes’ giant stride to make digital TV affordable to all families, the price of pay-TV has been greatly lowered, from average $50 per month to 3 or 5 dollars per month.

The pay-TV company which also made a slight increase on its offerings said this is necessitated by the impact of the rising foreign exchange rate which has lead to the upward review of its prices. According to her, “our business is not exempted from the effect of the naira depreciation affecting all businesses in the country.

All of our foreign content is bought in dollars and to continually serve our subscribers the best content, the subscription price has to be reviewed upwards.” “Over the last couple of months, StarTimes has been adding new and exciting channels, great local and international channels for the viewing pleasure of our teeming subscribers without an additional charge. These channels, including other existing flagship channels and content, were acquired at a cost which StarTimes has continued to bear to cushion the economic pressure on subscribers.”

 

 

Vanguard

Last year, Australians reported more than A$634 million lost to fraud, a significant jump from $489.7 million the year before.

The Australian Competition and Consumer Commission (ACCC) has released its latest annual Targeting Scams report.

But despite increased awareness, scam alerts and targeted education campaigns, more Australians are being targeted than ever before.

With all the technological tools we have, why does fraud continue to be so pervasive? And how can the damage be reduced?

Latest key findings

According to the ACCC’s report, “business email compromise” fraud rose to dominance in 2019.

At $132 million, it became the highest category of financial loss reported – the first time this has happened. This usually involves using phishing and hacking to infiltrate company systems and email accounts.

Offenders can intercept payment invoices, or create their own, and funnel victims’ funds into their own accounts. Businesses and individuals make their payments as usual, but unknowingly pay the offender.

Investment and romance schemes also continue to defraud victims. Reports of investment fraud totalled $126 million, up from $80 million in 2018. And romance fraud losses totalled $83 million, up from $60.5 million in 2018.

Overall, men reported higher financial losses ($77.5 million) than women ($63.6 million).

Years of statistics

Reflecting on a decade of the ACCC’s Targeting Scams reports, we can see how fraud has changed with the times.

Since the first report in 2009 (which recorded $69.9 million in losses) Australians have collectively reported more than $2.5 billion in losses.

The number of reports has increased significantly. While this likely reflects a higher percentage of the population being targeted, it also represents more authorities receiving complaints and contributing statistics.

For instance, 2019 marked the first year the big four Australian banks (Westpac, NAB, Commonwealth Bank and ANZ) contributed their data.

The ‘prince of Nigeria’ needs your help

Today’s offenders have very different approaches to those of ten years ago. There were once many more stories of Nigerian princes (although these still exist).

These days, victims are most often contacted by telephone, although email, text message and social media communications are also common.

Payment methods have advanced, too, with bitcoin and cryptocurrencies becoming popular ways for offenders to receive money.

According to the ACCC’s 2019 report, men were more likely to report losses to investment fraud, while women were the major target for romance fraud. Shutterstock

Why is fraud still so successful?

While technology has long helped scammers, it has also helped improve cyber security options such as antivirus software, and email filters to block spam. So why do we still have fraud?

Essentially, fraud takes a human approach. Criminals seek to capitalise on victims’ weaknesses in a calculated manner. For example, this year Australians looking to buy pets during lockdown lost almost $300,000 to puppy scams.

Offenders have also shifted their focus to counteract fraud prevention messages to the public from police and other agencies. One prime example is the Little Black Book of Scams released by the ACCC in 2008.

It provides comprehensive details of many common fraud schemes and has influenced fraud-prevention messaging across both the United Kingdom and Canada.

To counter prevention messaging, offenders now recruit Australians to launder their funds. Known as “money mules”, they are often victims themselves, asked to receive and transfer money on behalf of offenders.

From a victim’s perspective, there are fewer red flags when asked to send money to a Big Four bank account in Melbourne, compared to sending money to Lagos.

Similarly, since there has been a strong push against sending money to people you don’t know, offenders have embraced the use of romance fraud (which targeted more women than men in 2019).

 

Offenders develop relationships and build trust to eventually cheat victims. And as last year’s report notes, they are now initiating relationships through channels other than dating apps, such as Instagram and even the online game Words with Friends.

With a focus on building relationships with victims, fraud requests are no longer as outrageous as they once were (although this Nigerian astronaut scam was an exception).

As cybersecurity features such as email spam filters advance, attackers are finding new, innovative ways to deceive victims. Shutterstock

Manipulation and monopolising on emotions

As we gain a better understanding of how offenders operate, we’re starting to learn how effectively victims can be persuaded.

Fraud relies on the use of social engineering techniques such as authority and urgency to gain compliance. Offenders often take on the identity of someone with power and status to persuade victims to send money. They also stress the urgency of the request, to stop victims from thinking too much.

Psychological abuse techniques are also used to isolate and monopolise on victims. In this way, offenders try to remove victims from their support networks and place an air of secrecy around their interactions. And this limits a victims ability to seek support when needed.

There has been a greater recognition of the problem across government and industry. Despite this, there’s still often a sense of shame and embarrassment at being deceived, and victims have difficulty reporting.

 

Defences for the future

The latest Targeting Scams report shows us offenders are still looking to gain a financial advantage, and will do whatever it takes. While you can’t guarantee safety, there are some simple steps that can help reduce the likelihood of fraud:

  • recognise your own vulnerability to fraud. Everyone is a potential target.

  • talk about fraud-related experiences with family and friends in a non-judgemental way. Offenders want victims to stay silent.

  • in an uncertain situation, don’t feel pressured to xfrespond, as offenders rely on people making quick decisions. Hang up the phone, delete the email, or simply step back.

Now, more than ever, we must recognise the prevalence of fraud and the ways it impacts individuals and organisations across society. If we can learn from the past decade, maybe we can improve our defences for the next decade. The Conversation

 

Cassandra Cross, Senior Research Fellow, Faculty of Law, Cybersecurity Cooperative Research Centre, Queensland University of Technology

This article is republished from The Conversation under a Creative Commons license. Read the original article.

The Nigerian Government has revealed plans to end the monopoly enjoyed by cable television service providers, especially Digital Satellite Television, owned by MultiChoice, a South Africa-based company.

The plan is said to include ending exclusive rights to sporting events.

Only DStv currently broadcasts major football competitions in Nigeria, especially the English Premier League.

The government said it had amended Nigeria’s broadcasting code to prevent DStv and others from monopolising their channels and contents.

The House has been probing DStv for allegedly cheating its Nigerian subscribers by restricting them to prepaid plans and increasing its subscription rates on June 1, 2020, despite the economic impact of COVID-19 pandemic lockdown on the people.

At the continuation of the investigative hearings organised by an ad hoc committee of the House on the matter in Abuja on Tuesday, Minister of Information and Culture, Alhaji Lai Mohammed, had dismissed claims by DStv that pay-per-view was not proper for the Nigerian market.

Mohammed noted that StarTimes, the cable arm of the Nigerian Television Authority, was already operating for some years.

In an audio recording obtained by our correspondent, Mohammed could be heard responding to questions from the lawmakers.

The minister said, “On the issue of increase in price for subscribers, with the onset of COVID-19, one of the first things we did in the ministry with the NBC (National Broadcasting Commission) was to provide succour to broadcasters.

“We suspended payment for the initial two months to all broadcasters so that they would be able to absorb the impact of COVID-19. Therefore, it will be unfair for those for whom we have suspended payment to also at the same time increase their own fees. And I’m sure that the DG of NBC will take up this matter.”

On the issue of monopoly, Mohammed stated that the President, Major General Muhammadu Buhari (retd.), had in 2019 set up a board of enquiry to look into the activities of broadcasting stations, to ascertain the potency of the broadcasting code and broadcasting act to curtail and regulate the industry against excesses.

He added, “We took that opportunity also to make right recommendations to Mr President, including the breaking of the monopoly of the various giant operators. It is to the credit of Mr President that he did approve those recommendations.”

Mohammed noted that some recommendations would require that the National Assembly amend the provisions of the Nigeria Broadcasting Act.

The minister said, “You will notice, in recent weeks, a lot of attacks on the ministry as a result of these amendments. These amendments have actually struck at the heart of monopoly. These amendments are, for once, giving back to Nigerians their own industry.”

Earlier, Chairman of the committee, Mr Unyime Idem, asked Mohammed and the acting Director General of the NBC, Armstrong Idachaba, to order DStv to suspend its recent rates’ increment.

Mohammed immediately ordered the Idachaba to issue the notice.

Idem had stated that the minister and all stakeholders present should ensure and commence full implementation of its directives.

The House committee’s order included “a marching order to the service providers, particularly Multichoice’s DStv, to reverse the recent June 1, 2020 price hike and revert to the old price as this is not the best of times to increase the prices of services, no matter the reasons for such increase, taking into consideration the ravaging effect of COVID-19 on the economy of Nigerians.”

It added, “Come up with a robust strategy to break the monopoly and open up the industry for larger participation. PAYG regime for the digital TV broadcasting in Nigeria, with particular reference to DStv, GOtv, StarTimes and Kwese TV.

“Deregulation of content right by DTH (direct-to home), DTT (digital terrestrial television) and IPTV (Internet Protocol Television) operators. Encouraging local content participation through content sharing.”

 

Source: PUNCH NIGERIA.

The House of Representatives has begun an investigation of cable and satellite television service providers in Nigeria over their high tariffs and monopolised bouquets.

The House is specifically probing the Digital Satellite Television, a South Africa-based provider owned by MultiChoice, for allegedly cheating its Nigerian subscribers by restricting them to prepaid plans.

Members of the House had on March 17, 2020, took turns to criticise DSTV for refusing to introduce pay-per-view.

Consequently, the House had resolved to set up the committee to probe into the matter, with the mandate to invite Federal Government agencies regulating the industry, including the Federal Ministry of Communications and Digital Economy and the Nigerian Communications Commission.

Again on June 2, 2020, the House inaugurated an ad hoc committee to investigative the increment of subscription rates by Multichoice and other cable television service providers.

The committee, which the Speaker, Femi Gbajabiamila, constituted and inaugurated, assured Nigerians of justice and fairness, saying it would work towards making the providers to adopt ‘pay per view’ system.

Chairman of the committee, Unyime Idem, at an investigative hearing held in Abuja on Thursday, said the National Broadcasting Commission was summoned to explain why DSTV and other service providers have refused to introduce pay-per-view.

Idem said, “Today, we want to hear from you and your team, how the industry can be properly managed so that beneficiaries who are Nigerians can smile at the end of the day. I am sure you must have been hearing of the yearnings of Nigerians for years now, who are the subscribers to these services, that they are not happy with the current services they are getting from the providers.

“They have been crying on a daily basis that they are not satisfied with the services they are getting from the providers in terms of high charges, price hike and, most importantly, considering what is obtainable in other countries of the world, that is pay-per-view offer that other countries are giving to their subscribers.

“Why is it not implemented in Nigeria? We want to know your position as the regulator of this service providers. What are the bottlenecks? What are the constraints? What are the implications? Why are we not enjoying ‘pay as you go’ as subscribers to these service providers?”

 

Punch News

Study shows Satellite TV reception increases by 23% in Nigeria and 19% in Ghana in 2019 since the last study, conducted two years ago; SES (www.SES.com) currently reaches 35 million TV households across the African Continent.

SES, the leader in global content connectivity solutions, has unveiled the results of its annual Satellite Monitor survey, which reveals a steady increase in the penetration of satellite TV across Africa. The study on TV reception also shows an increase in SES reach from 33 million African households in 2018 to 35 million households in 2019.

In Nigeria, the Satellite Monitor results revealed that satellite TV reception was the choice for 11.8 million households in 2019, a 23% increase compared to 2017, and a further 4.7 million in Ghana, up by 19% from 2017. The study also highlighted that High Definition (HD) TV sets are becoming increasingly popular, already present in approximately 50% of Ghanaian and Nigerian TV homes.

Other TV reception modes in Nigeria and Ghana currently include terrestrial, cable and IPTV. According to the latest survey results, satellite TV is steadily gaining popularity as the TV reception mode of choice in both markets, with 70% of TV homes in Ghana and 33% of those in Nigeria opting for satellite in 2019 – an increase from 64% and 27%, respectively, compared to 2017.

TV reception modes (in million homes)

TV reception modes

Ghana

(in million homes)

2017

2019

Satellite

4.0

4.7

Terrestrial

2.1

2.0

Cable

n.a

n.a

IPTV

n.a

n.a

Total

6.1

6.7

TV reception modes

Nigeria

(in million homes)

2017

2019

Satellite

9.7

11.8

Terrestrial

25.2

24.1

Cable

0.1

0.1

IPTV

<0.1

<0.1

Total

35.0

36.0

 

The Satellite Monitor results show that SES also increased its reach across the broader African continent. In addition to the growth of homes reached in Nigeria and Ghana, the study shows that SES’s satellites reach 11.6 million homes (satellite and terrestrial) in anglophone West Africa; 6.2 million satellite homes in francophone West Africa; 17.7 million homes (satellite and terrestrial) in sub-Saharan Africa; and 0.9 million satellite homes in East Africa.

“The results of our annual Satellite Monitor market research demonstrate that satellite continues to be the optimal infrastructure to deliver hundreds of TV channels and in high picture quality too, while offering an affordable solution in the transition from analogue to digital TV,” said Clint Brown, Vice President of Sales and Market Development for SES Video in Africa. “With the deadline for the analogue switch-off looming in both countries – 2020 in Ghana and 2021 in Nigeria – the 2019 Satellite Monitor findings confirm that end consumers in regions going through digital migration are satisfied with satellite TV and choosing it for its better value proposition and variety of free-to-air offerings, rather than purchasing new hardware and switching to digital terrestrial TV.”

This SES annual market research offers a comprehensive and in-depth analysis into the TV market in each country it surveys and is designed to assess the development of TV reception modes and SES’s total reach in the market, as well as to serve as a benchmark for the TV and satellite industry. In 2019, Ghana and Nigeria were the main surveyed African countries as they stand as the most dynamic and highly penetrated TV markets in sub-Saharan Africa and have been surveyed by SES since 2015. 

Six years ago, a cashless policy became fully operational in Nigeria. The aim was to encourage electronic transactions with a view to reducing the amount of physical cash in the economy. The logic was that this would minimise the risk of cash-related crimes.

But a major downside of the policy has been pervasive electronic banking fraud (e-fraud). Although the cashless banking system was designed to foster transparency, curb corruption and drive financial inclusion, it’s threatened by the growing perpetration of fraud.

About N15.5 billion was lost to bank fraud in 2018. About 60% of the fraud was perpetrated online owing to available internet-based and tech-rated banking services.

Our research investigated dimensions of electronic fraud in Nigeria. We found three: internal fraud carried out by banking staff; external fraud carried out by ordinary Nigerians; and collaboration between fraudsters and banking staff.

We found that inefficient supervision, non-performance of oversight by regional heads of banks, and poor follow-up on customers’ addresses (Know Your Customer) accounted for the fraud that took place.

Our study provides the banking industry, banking public and investors with critical pointers on how to reduce fraud.

Different types

Our study involved collecting data as well as conducting interviews with 30 people. These included victims of bank fraud, bank customers who did not subscribe to the cashless policy and fraud detectives at the Economic and Financial Crimes Commission (EFCC).

These were the common patterns we uncovered.

Insider fraud: By insider, we mean those working with banks or those in a relationship with account holders. Here, the fraud was exclusively executed by members of staff in the banking system who exploited the strategic position they held in the system and their grasp of how it works. Banking institutions and customers were their victims.

An example we came across during our research was the case of a N90 million (US$452,261) fraud perpetrated by an account officer of a major eatery in Lagos State. The job of this account officer was to collect the eatery’s takings and deposit them at the bank. A fraud detective told us that:

As the account officer he would collect money on a daily basis and was expected to credit the company’s account. However, he would collect money on Monday and lodge it and collect on Tuesday and not lodge it. He was missing one day out. He did this continuously until he was able to rake in N90 million. At this time, when the eatery management raised the alarm on their account, he ran away and could not be found. We however used his sister to arrest him. We were only able to recover N8 million naira from him. He had used part of the money to organise his wedding, had a baby and almost completed a four-bedroom bungalow at another area in Lagos.

Bank fraud is often successful because many Nigerians don’t subscribe to transaction alerts. The eatery management trusted their account officer but did not know that he was dishonest.

Outsider fraud: These perpetrators were external to the banking system. They thrived on their internet skills and sometimes on their understanding of the victims’ routine and identity.

An example we came across was the fraudulent use of bank verification numbers (BVN). These were made compulsory by the Central Bank of Nigeria in 2014. All bank account holders had to undertake biometric registration. The intention was to ensure security and check fraud.

But fraudsters have found a way to cheat the system by sending bank customers false emails asking for their bank verification details. As one victim explained to us:

I needed to make some transactions and I headed for my bank. I had called my account officer ahead of time. On getting to the bank, I connected my computer and got a mail from a supposed same bank. I was asked to click on a link and supply my BVN details for update of my account or face service suspension on the account. I just clicked the link and supplied my details and behold, N1 million debit alert came on my phone within five minutes! I was shocked and devastated but before we could do anything they had withdrawn everything.

Collaborative fraud: This involved collaboration between bank staff and fraudsters outside the banking system. Banks and individual account holders were the victims. For example, bank staff could provide account details of customers to the collaborating fraudster.

Governance gaps

Despite this weak governance architecture, which is still not fraud proof, bank executives reported having in place mechanisms which had limited the incidence of fraud. One was sending out information to customers who subscribed to electronic alerts. Through this, banks contact and send anti-fraud messages to their customers.

Owing to reputational risk, banks try to refrain from public prosecution of erring staff. We found that banks adopted shaming as a mechanism for instilling discipline within their organisations while attempting to ease out “bad eggs” through flagging of their images on computers and across the banking industry.

There is a need to check fraud through customer awareness and financial literacy education.

While fraudsters continue to design new ways of working on customers’ vulnerabilities, Nigerian banks need to use the Cybercrime Act to prosecute offenders as a way to boost confidence in the banking sector and deter fraud in the future.The Conversation

 

Oludayo Tade, Researcher in criminology, victimology, electronic frauds and cybercrime, University of Ibadan

This article is republished from The Conversation under a Creative Commons license. Read the original article.

The domestic wings of the Murtala Muhammed Airport (MMA) Lagos, and Nnamdi Azikiwe Airport, Abuja have been rated 57 percent in terms of meeting the requirements of Nigeria Civil Aviation Authority (NCAA) for the commencement of operations.

This implies that if the federal government had not shifted the proposed resumption of domestic flights hitherto slated for Monday (today), it would have been practically impossible to restart operations given that there are many gaps required to be filled, Daily Trust can report.

The NCAA Director-General, Capt. Musa Nuhu had at a briefing of the Presidential Taskforce on COVID-19 on Thursday last week declared that the June 21 resumption date was no longer feasible.

Our correspondent learnt that this conclusion was reached after a virtual stakeholders' meeting held on Tuesday where all stakeholders presented their restart plan in line with the checklist provided to them by the regulatory authority.

At the meeting, it was discovered that there are still many gaps that were yet to be filled by the operators including airlines and airports managers.

However, a follow-up meeting held on Friday night gave a vivid update on the status of the industry restart plan.

According to statistics from the NCAA, air navigation service providers are 80 percent prepared; airlines were scored 75 percent in terms of preparedness; ground handlers 180 percent, and domestic airports 57 percent.

However, the Lagos airport private terminal known as the MMA2 scored 87 percent, showing readiness to resume operations.

There are five airports slated for the commencement of operations including Lagos, Abuja; Mallam Aminu Kano Airport, Kano; Port Harcourt Airport, Omagwa Rivers State and Sam Mbakwe Airport, Owerri.

It was learnt that there would be a mock exercise tomorrow or Wednesday to simulate the planned resumption of flights, while the NCAA DG is expected to present another report to the Minister of Aviation, Senator Hadi Sirika.

A new date would also be suggested for the resumption of flights with stakeholders looking at between the first or second week of July.

Aviation analyst and former Commandant, Murtala Muhammed Airport, Lagos, Group Capt. John Ojikutu (rtd) said, "If FAAN is scoring 57% with Lagos and Abuja now, we should all be worried; what this conference has shown us is that the recent NCAA audits seem to put emphasis on private airline operators than the government operators.

 

Credit: Daily Trust 

Nigeria will find it impossible to place taxes on the transactions of foreign tech companies like Netflix, Facebook, Google, Youtube and other virtual firms without foreign help, Head of Research at SBM Intelligence, Ikemesit Effiong, has said.

It will be recalled that the federal government announced its intent to tax OTT’s in the Finance act the president signed earlier in the year.

The legal document, which reviewed the countries tax policies, included any business that “transmits, emits, or receives signals, sounds messages, images or data of any kind by cable, radio, electromagnetic systems or any other electronic or wireless apparatus to Nigeria in respect of any activity including electronic commerce, application store, high-frequency trading, electronic storage, online adverts, participative network platform, online payments and so on, to the extent that the company has a significant economic presence in Nigeria and profit can be attributable to such activity.”

Effiong told SaharaReporters that it would be difficult for the federal government to calculate the Nigerian derived earnings of these companies’ activities.

He is sceptical about how the government will, for example, find out the volume of activities engaged in by Nigeria’s estimated 20m Facebook users and how much each transaction yielded in revenue.

He said countries across the world were discussing how to tax over the top technologies (OTT’s) and virtual firms that do not have end-user telecommunication infrastructure and share the profit.

“The only way I see Nigeria being able to negotiate a tax regime (OTT) will be for them to collaborate with our European and American partners,” he said.

“I can’t think of any African economy – South Africa included– that can do this on their own. Even global powers like the US and the EU are struggling with this.”

The minister for finance, Zainab Ahmed, gave clarity on how the government plans to implement the new tax regime by issuing the Companies Income Tax (Significant Economic Presence) Order. The finance minister is also empowered by the law to determine who a SEP is.

In the letter of the order, the first guiding principle in identifying who a SEP is will be to check if the company has sustained interaction with customers in Nigeria or agents of foreign entities based in Nigeria and have an annual earning in any currency whose value comes up to N25m or more.

Firms that fall into this category have been asked by the order to customize their platforms to enable them to receive payment in naira for taxable reasons.

“A foreign entity providing technical services such as training, advertising, supply of personnel, professional, management or consultancy services shall have a SEP in Nigeria in any accounting year if it earns any income or receives any payment from a person resident in Nigeria or a fixed base or agent of a foreign entity in Nigeria,” the act reads.

Education service providers are exempted though. Companies like Facebook, Twitter and Google, that make as much money off traffic as they do from promoted posts, would be difficult to tax, experts believe.

Most of these OTT firms do not have offices in Nigeria. Those who do only maintain a representational presence and Effiong thinks this is the flaw in the plan.

“If Facebook says we had 17m unique visits, how are you as a country going to quantify and verify it?” he wondered.

Explaining that every taxpaying entity in the country has to open their books to the federal or state revenue boards, Effiong said OTTs have to largely comply, they have to be transparent about the number of Nigerian users they have, the ads those users clicked on, what the monetary cost of those ads was… for tax authorities to be able to assess them.”

Save for a Chinese/Iranian/Russian mode of internet monitoring, the lawyer said it would be impossible for the government to validate the genuineness of the data it is given.

Kenya is another African country that has attempted to levy an OTT. Its revenue authority said in a recent draft regulation that foreign companies offering digital services should register in the country to pay value-added tax or get a tax representative.

Outside Africa, France has been the most desperate to begin charging virtual firms for the number of undeclared profits they earn across the world.

In January, Macron’s government said it was going to go ahead of the EU conversation on the matter to collect three per cent of the global annual earnings of these firms.

That move was swiftly countered by the Trump administration, who threatened to massively heighten excise duties on goods coming out of France. Since then, Coronavirus has stalled the possibility of a joint tax regime for over-the-top technologies in the European Union.

Nigeria and Kenya are chasing the monies that could come from this new pull of cash though. It could be vital funding that would ease the recession fears in Africa’s largest economy.

 

SOURCE: SAHARAREPORTERS

 

 

 

The Government of Nigeria plans to tax foreign digital service providers offering services to Nigerians and earning revenue in naira.

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

The Minister of Finance, Zainab Ahmed, had issued the Companies Income Tax (Significant Economic Presence) Order, 2020 as an amendment of the Finance Act 2019.

The order aimed to impose tax on a foreign entity with respect to certain services or digital transactions if it had a Significant Economic Presence in Nigeria.

It further stated that the finance minister may by order, determine what constituted SEP in Nigeria.

Netflix, Facebook, Twitter, among others are some of these foreign companies that offer digital video and advertising services to Nigerians.

Others like Alibaba and Amazon generate revenue from Nigeria by processing and transmitting data collected about users in Nigeria, provision of goods or services directly or through a digital platform or offer intermediate services that link suppliers and customers in Nigeria.

The new regulation would apply to companies with income of N25m or equivalent in other currencies from Nigeria in a year and those with a Nigerian domain name (.ng) or a website address in the country.

The SEP order mandated foreign companies with sustained interactions with persons in Nigeria and customising their digital platforms to target persons in Nigeria by stating the prices of its products or services in naira to pay taxes.

According to the Act, a foreign entity providing technical services such as training, advertising, supply of personnel, professional, management or consultancy services shall have a SEP in Nigeria in any accounting year if it earns any income or receives any payment from a person resident in Nigeria or a fixed base or agent of a foreign entity in Nigeria.

However, payments made to employees of a foreign entity or for teaching in an educational institution are exempted.

Analysts at PricewaterhouseCoopers said some of the affected foreign digital companies would be required to register for income taxes in Nigeria and file annual tax returns even if they did not have a physical presence in Nigeria.

They added that Nigerian resident businesses (as well as the fixed bases of non-resident companies) that have transactions with the affected non-resident companies would also be required to account for withholding tax on some of the payments made to these foreign companies.

PwC raised concerns as to how the FIRS would enforce compliance without international consensus, as a number of the companies affected might be outside the territorial reach of the agency.

According to the consulting firm, the problem will also be exacerbated where the companies sell their products and services directly to individual consumers in Nigeria.

 

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