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Digital Taxation Troubles Tech Businesses in African Countries

Mohammed Yusuf

   NAIROBI, KENYA - More and more African countries are taxing digital
   platforms and mobile money transfers to fund economic development.

   Nigeria is the latest country to join the trend, with a new 5% tax on
   items bought online. It wants banks to deduct the tax from online
   transactions for the government.

   Segun Abiona is the founder of Nicole and Giovanni, a Nigerian company
   that sells men's accessories. He says more taxes will reduce the gains
   he has made.

   "It's a form of double taxation on us because if you tax every
   transaction that comes online we still end up paying taxes, which is 5%
   VAT (value-added tax), 5% of every sale we make in terms of VAT,"
   Abiona said. "It is going to discourage internet purchases knowing we
   are fully grown in terms of online space. We are still trying to
   encourage more people to shop online and at the same time eradicate the
   fear of people being get scammed online."

   According to some business analysts, at least 100 million people on the
   continent use mobile financial services.

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