Is Nigeria now collecting taxes on Crypto?

It’s Friday! Shut down your laptops and enjoy the short weekend. Monday would be here in no time.

Before we go into the stories for today, we asked a question in our last newsletter:

Which African country was the first to begin producing Electric Vehicles?

The answer is Uganda. It launched The Kiira EV, Africa's first electric vehicle, in 2011

In this letter, we explore:

Is Nigeria now collecting crypto taxes
Kenyan telecom giant offers phones, rent, and food to victims of the protest
Telecom Egypt and 4iG Group Partner to provide high-speed Internet to Egyptians

We also curated updates on startup funding in Africa, weekend reads, and several opportunities.

THE BIG THREE

Is Nigeria Now Collecting Taxes on Crypto?

Photo by PiggyBank on Unsplash

Since the start of the year, Nigerian authorities have been in a public feud with cryptocurrency exchange companies, with Binance at the forefront of that battle.

Now, KuCoin, one of the popular crypto exchanges in Nigeria which shut down its peer-to-peer platform in May, bowing to regulatory pressure from Nigerian authorities, has introduced a 7.5% VAT on trading fees for Nigerian users starting July 8, 2024. It disclosed that the tax will range from 0.1% to 0.05%, which will be charged on transaction fees and not on total transaction amounts.

This means that if a person buys $1000 worth of crypto, with a 0.1 % fee rate, the transaction fee would be $1, and the VAT would be $0.075, which is 7.5% of the transaction fee, making the net amount for the transaction $998.925.

Nigerians have reacted to this announcement by asking the next logical question: Why is the government collecting crypto tax, even though it hasn’t been legalised in the country?

This has led to some suggesting that this is a compliance move from KuCoin to facilitate P2P transactions. This might not be far-fetched, considering Nigeria indicated plans to tax crypto in its Finance Act 2022.

“Subject to any exceptions provided by this Act, all forms of property shall be assets for this Act, whether situated in Nigeria or not, including options, debts, digital assets, and incorporeal property generally.” The act says.

Looking forward: Questions remain over whether the central bank has approved this new VAT rate from KuCoin or if it’s just the Federal Inland Revenue Service behind this. If this new tax law is approved, Nigeria will join Kenya and South Africa as African countries that have started exploring crypto taxation.

Kenyan Telecom Giant Offers Phones, Rent, Food to Victims of the Protest

Photo source: The Kenyan Times

Safaricom has moved to save its public reputation in Kenya by assisting individuals affected by the protests. This comes after an accusation of breaching data privacy laws by sharing the personal information of the Finance Bill 2024 protestors with the Directorate of Criminal Investigation (DCI). The telecom giant also came under fire after an internet outage during the protests. The company has come out to deny both accusations, but it still hasn’t stopped the public backlash, which has even led to some customers selling their shares.

Safaricom has moved quickly to redeem its public image by offering smartphones and airtime to people who lost their phones during the protests. It will also support affected individuals with one year’s rent and three months' worth of food.

Safaricom CEO Peter Ndegwa made this announcement during his visit to Kenyatta National Hospital, where they donated KES15 million ($116,279) to support the protest victims.

In addition, through its M-Pesa Foundation, Safaricom is organising medical camps in affected areas, including Githurai and Rongai, beginning July 6, 2024. It will also mobilise its Gen Z employees and other organisations under the #GenZforGenZ initiative to mobilise volunteer squads to lead community outreaches, clean-ups, and medical camps.

Rewind: This is not the first time Safaricom has donated to a peaceful initiative. In 2013, it donated 50 million SMS(short message service) to support a peace program based on SMS technology.

Telecom Egypt and 4iG Group Partner to Provide High-Speed Internet to Egyptians

Photo source: Capacity Media

Telecom Egypt and Hungarian firm 4iG Group are teaming up to build a $600 million fibre optic network across Egypt. This project aims to bring high-speed internet to millions of homes and businesses.

Why this is important: This is a big deal for Egypt's digital future. The new fibre network will provide much faster and more reliable internet access, opening doors for new technologies and economic opportunities.

“Through these partnerships, we aim to create jobs, build a skilled workforce that supports local enterprises, and improve the quality of life for Egyptians," said Gellért Jászai, Chairman of 4iG Group

Laying the Foundation for a Digital Egypt: The Egyptian government is actively pursuing its "Digital Egypt" strategy, aiming to bridge the digital divide and propel the country into a tech-driven future. This fibre network is a key piece of the puzzle. Not only will it enhance internet connectivity, it will also provide the essential infrastructure for the deployment of 5G.

Zoom In: The project will be rolled out over ten years and will provide high-speed connections to an estimated 6 million households. The two companies are still finalising the details, but this partnership is expected to create jobs, improve skills training, and boost Egyptians' overall quality of life.

This isn't the first collaboration between Telecom Egypt and 4iG Group. They're also working together on a subsea cable connecting Egypt to Albania, further strengthening regional digital connections.

💰Recently Funded Companies

Here’s a roundup of African startups that secured funding last week:

Pumpkn, a South African startup, has secured an undisclosed investment from Renew Capital.
Connect Money, an Egyptian fintech company closed its seed funding round of $8 million, which was led by venture capital firms Disruptech Ventures and Algebra Ventures.
Egyptian startup ElKheta has raised $400K in seed round from EdVentures.

📰 Weekend reads

🎥 Weekend watchlist

💼Opportunities

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