The Federal Inland Revenue Service (FIRS) has announced that Nigerian Telecommunications frontline companies, MTN and Airtel as well as Deposit Money Banks (DMBs) will now be saddled with responsibility to withhold value added tax (VAT) charged on all taxable supplies made to them which will subsequently be remitted to the Federal Government’s account. The new policy will be effective by January 2023.

The VAT that will be witheld by these companies are to be remitted to the FIRS on or before the 21st day of the month immediately following the month the tax was withheld, in the format prescribed by the service.

In a public notice FIRS released on Monday and signed by Muhammad Nami, the FIRS executive chairman, the role of the selected companies as well as the obligations of their suppliers with regards to the withholding of VAT were addressed. The public notice read as thus:

“This notice is given to all persons carrying on trade, profession or business of any kind, tax practitioners and the general public that, with effect from 1st January, 2023; in line with the provisions of section 14(3) of the value added tax act cap. V1 LFN 2004 (as amended), the following companies are appointed to withhold or collect VAT charged on all taxable supplies made to them: MTN; Airtel; and all money deposit banks—as defined by the CBN guidelines,” the notice reads.

“The companies shall remit the tax withheld or collected, in the currency of transaction, to the service on or before the 21st day of the month immediately following the month the tax was withheld or collected,” the notice reads.

“The tax withheld or collected under this notice shall be remitted in the format prescribed by the service but separately from VAT due on the companies’ taxable supplies.”

The FIRS further explains that a supplier whose output tax is withheld, as provided in the notice, “may deduct the input tax paid on the goods purchased or imported to make the taxable supply from the output tax collected on other taxable supplies”.

“And where the input tax paid to make the supply is not fully recovered from the output tax on other taxable supplies, the balance is refundable to the supplier; provided that a supplier who is entitled to a refund may utilise the amount refundable to offset future VAT liability or request for a cash pay-out.” FIRS added.

The revenue agency of the Federal Republic of Nigeria assured that adequate measures have been put in place to ensure prompt payment of refundable input tax under the new arrangement. It also said input tax claims, which include refunds, are subject to the limitations imposed by section 17(2)(a) of the VAT act.
Section 17(2)(a) of the VAT act states that, “input tax on any overhead, service, and general administration of any business which otherwise can be expanded through the income statement (profit and loss accounts) shall not be allowed as deduction from output tax”.

According to the PricewaterhouseCooper (PWC Nigeria), cited in news article by the Cable, under the withholding VAT rule, customers will be required to pay the vendor net of VAT while the VAT is remitted directly to the FIRS as against the supplier or service provider charging VAT on their invoice which is to be paid by the customer along with the price of the good or service for onward remittance to the FIRS. PWC Nigeria was reported to have said customers of MTN, Airtel and banks will not be affected, and the prices of telecom and banking services should remain the same.

“VAT is administered by FIRS at a charge rate of 7.5 percent. It (FIRS) transfers the generated revenue from the tax paid to the three levels of government via the federation accounts allocation committee (FAAC)” the cable reported.

The co-CEOs of Jumia have stepped down: “African e-commerce giant Jumia has made a change in management as co-founders Jeremy Hodara and Sacha Poignonnec step down effective today as co-CEOs”. You may wonder why it took that long. My position remains that what Jumia is trying to do is hopeless. There is no human who can run a B2C ecommerce business in sub-Saharan Africa and make money in the way Jumia is operating. I made that point in the Harvard Business Review many years ago and it remains so. 

From Kalahari to Mocality, OLX to old Konga and Jumia, the result will be the same: B2C ecommerce is a waste of time. The challenge is marginal cost paralysis which destroys value as you scale the business. In other words, you cannot compound and leverage anything because your unit economics does not improve as you expand.

The viable path to B2C ecommerce in Africa is the type Copia runs in Kenya. Where you cannot do that, go for B2B as TradeDepot, Mintyn and other companies do. But the traditional B2C ecommerce will burn your money.

Jumia remains a great company with many latent opportunities. I challenge the new CEO to adopt the double play strategy around its ecommerce’s one oasis. There are many great pieces in that company. But it has to restructure to unlock great moments out of the firm.

If Jumia can invite me to its Board, I will invest $100,000 tomorrow morning in the company. One area I will focus on is how it can overcome the marginal cost issue, and unlock profitability via a double play strategy. Hope they take me up! Jumia, let’s do it. I buy (to have skin in the game) and join your Board. We will fix this company.

The Double Play Strategy

from Yahoo Finance here

The two founders, who until today shared the chief executive role, have been at the helm of Africa’s only publicly traded company on the NYSE for over a decade, overseeing Jumia’s pan-African expansion across 11 countries as well as its product journey that now includes a marketplace, JumiaPay, its payment arm and a logistics platform.

Francis Dufay, who previously held the CEO role at one of Jumia’s fledging markets, Ivory Coast, will now replace both co-founders as acting CEO, the company’s Supervisory Board said in the statement. Dufay has been with Jumia since 2014, holding multiple senior leadership roles, more recently executive VP, Africa, responsible for the group’s e-commerce business across the continent.

According to the Supervisory Board, Dufay and Antoine Maillet-Mezeray — previously Jumia’s Group chief financial officer — have been appointed members of the company’s Management Board. Maillet-Mezeray, having stayed with Jumia for over six years and driving the company’s finance function and “further developing it in a public market context,” has earned a promotion too: executive vice president, Finance & Operations.

National Broadcasting Commission (NBC) has directed pay television giant, Multichoice to sublicense some of its channels to Metro Digital Limited (Metro TV) in compliance with the current Broadcast Code and a recent appeal court judgement.

According to the Vanguard, the NBC gave the directive to the South African satellite TV network in a letter dated 25 October 2022, addressed to the Chief Executive Officer of Multichoice and signed by Chief George Obi, Head of Legal of NBC on behalf of the Director General of the commission.

The directive read in part, “You are hereby directed to comply with the 6th edition of the NBC Code as amended pursuant to Metro Digital’s request for channels sublicensing as ordered by the Federal Court of Appeal.”

Managing Director of Metro TV, Dr Ifeanyi Nwafor, MD, who has been on a three year legal battle with NBC and Multichoice to do the needful, told Vanguard on Monday in Port Harcourt, Rivers state, that the development will end Pay TV monopoly, restore several jobs loss and benefit Pay TV consumers in better service at affordable rates.

Nwafor said, “The growth of the broadcast industry in Nigeria has been limited due to monopolistic practices of the dominant player in the industry. AIl indigenous companies licensed in the last twenty years did not succeed because of these practices which includes content exclusivity, warehousing etc.

“Federal Government (FG) of Nigeria realizing the inherent danger outlawed foreign and domestic acquisition of contents on the basis of exclusivity, through amendment to the Broadcast Code. Furthermore, licensees and broadcasters are obligated to sublicense channels to other licensees or broadcasters for commercially agreeable fees.

“In tune with the foregoing, the appeal court sitting in Port Harcourt, Rivers state in an appeal filed by Metro Digital, ordered the regulatory body, NBC to execute its statutory functions in accordance with the provisions of the code.

“We are glad NBC has complied with the order of the court. The end of monopoly in Nigeria broadcasting industry will enhance competition, innovation and quality of service delivery. The industry will experience rapid growth, consumers will benefit from the competitive pricing that follows.

“We commend the role played by the FG, the Minister for Information and Culture, Alhaji Lai Mohammed and NBC towards the repositioning of the industry and end the monopolistic practices that have held the industry down for a long time.”

Nwafor who said Metro Digital would restore operations in coming disclosed that his organisation has applied to Multichoice requesting to be sublet Metro TV over 50 channels including views delight, the English Premier League on Supersports.