The tribunal found that the company, despite being registered in the UK, could not prove that its management and operations were controlled from the United Kingdom, as required under the Kenya-United Kingdom Double Taxation Treaty (DTT).

The Kenya Revenue Authority (KRA) had previously assessed M-KOPA’s tax obligations, including withholding tax and Pay As You Earn (PAYE), from 2017 to 2019, amounting to $6.8 million (Ksh 585 million).

M-KOPA contested this, arguing that since it was incorporated in the UK and claimed to be managed from there, it was not liable to pay taxes in Kenya. However, the tribunal dismissed this assertion, pointing out that the company had failed to provide sufficient evidence to back its claims.

Central to the tribunal’s decision was the determination that M-KOPA’s key business operations and management decisions were largely made within Kenya. 

Despite the company maintaining a registered office in the UK and having most of its directors living outside of Kenya, the tribunal found that the chief executive officer (CEO), chief financial officer (CFO), and chief commercial officer (CCO) were all based in Kenya. 

The tribunal concluded that this established Kenya as the company’s tax residency, making it liable for income and capital gains tax under Kenyan law.

This ruling could set a guide for other firms in Kenya with similar tax residency arrangements. M-KOPA, which operates in several African markets, including Kenya, Nigeria, Ghana, and South Africa, offers a range of products, such as solar power systems, smartphones, and electric bikes. 

These are provided through a pay-as-you-go model, where customers make small, incremental payments.

In 2023, the fintech company secured $250 million in debt and equity funding to support its expansion across Africa. However, with this recent tax ruling, M-KOPA may face further investigations over its tax compliance in other jurisdictions where it operates.

He said this while urging the citizens to endeavour to pay their taxes to boost government revenue and improve service delivery.

“That is too low for a country that has more than 200 million populations,” he said.

Shehu made this known in an interview with the News Agency of Nigeria (NAN) on Sunday.

Shehu also disclosed that the commission developed software to enhance transparency in revenue generation and sharing amongst the three tiers of government.

He lauded the idea of a Tax Reform Committee recently set up by President Bola Tinubu.

He said that the committee would do a lot to include economic players from the informal sector in the tax net.

“There is all this debate about the informal economy. What this tax reform committee will do is bring a lot of agencies together, including RMAFC. We are members of that committee. We have articulated our position, and we will communicate what we believe can add value to the discussion.

“At the end of it all, we will have a better society where more people are paying taxes and the money will be utilised for better services and infrastructure so that every Nigerian can benefit,” he said.

He urged the Federal Inland Revenue Service to collaborate with the Nigeria Customs Service to identify certain categories of Nigerians who evade taxes.

“There are some taxes that the government is not getting from Nigerians. I believe the FIRS will look at all those things and then collaborate with the NCS for better efficiency.

“I think it is very important for every Nigerian to try and pay their taxes because it is from those monies that you get services.

“All the things that people like to tell you about clean environments, good roads, and functional infrastructure in other countries—it is the taxes that citizens pay that are utilised for those services.

“People should learn to pay electricity bills; they should pay their water bills; they should pay just like you pay for telephone recharge cards.

“The more you pay your taxes, the more money the government has to put into road and rail construction, better hospitals, pensions, social security, and a better plan to help the needy,” he said.

(NAN).

Instead, they advocate for a total reversal of these taxes, citing their detrimental effects on some key sectors.

Experts argue that a mere suspension may not be sufficient to address the challenges faced by the sector, urging the government to take a more decisive step by permanently abolishing the taxes to revive growth and stimulate investment.

Tax payment, considered a burden by many Nigerians, remains an essential obligation to the government for the improvement and maintenance of Nigeria’s infrastructure.

However, the increasing frequency of tax rate hikes has blurred the lines of taxation for citizens. President Bola Tinubu, who assumed office last month, has embarked on Nigeria’s most ambitious reform agenda in decades.

The President aims to tackle the country’s debt burden, low economic growth, double-digit inflation, and mounting insecurity.

The African Development Bank (AfDB) has criticized Nigeria’s focus on an import substitution model instead of prioritizing wealth creation through export market development and product diversification.

Official data from the World Bank indicates that Nigeria’s Gross Domestic Product (GDP) was valued at $477.39 billion in 2022.

Addressing the Nigeria Employment Summit organized by the Nigeria Employment Consultative Association (NECA) in Abuja, Adewale Oyerinde, the Director-General of NECA, called on the Federal Government to abolish taxes on carbonated drinks.

Oyerinde argued that the suspension of these taxes by President Bola Tinubu for three months is insufficient. He urged the government to consider a complete reversal, stating that the taxes introduced during President Muhammadu Buhari’s administration have had a detrimental impact on the manufacturing sector.

Lamin Barrow, the Director-General of the Nigeria Country Department at the African Development Bank Group, emphasized the need for Nigeria to diversify its non-oil exports.

He highlighted that Nigeria’s heavy reliance on oil exports has exposed the country to the uncertainties of global oil markets, resulting in adverse effects on fiscal space and limited development spending.

Barrow further pointed out that Nigeria’s manufacturing sector, which contributes approximately seven percent to the GDP, has experienced a decline in performance over the past five years.

In an effort to cover its budget deficit, Nigeria has announced plans to borrow 8.8 trillion naira ($11.81 billion) in 2023. Additionally, the country has converted temporary overdrafts worth 23 trillion naira into long-term bonds this year.

However, the Nigeria Debt Management Office cautioned that the country’s total public debt could rise to 37.1% of its GDP this year, approaching the government’s self-imposed limit of 40%.

Barrow highlighted that Nigeria’s revenue-to-GDP ratio, standing at approximately eight percent, is among the lowest globally and falls behind the West African average of 13 percent. Nigeria currently faces significant fiscal deficits, estimated at six percent of GDP, primarily due to high public expenditures and declining revenues from crude oil exports.

Barrow emphasized the need for improving tax collection and administration, plugging leakages in revenue collection, and enhancing the efficiency of public investment programs.

President Bola Tinubu recently signed four Executive Orders, marking a significant step in his reform agenda. These orders include the suspension of the five percent excise tax on telecommunication services and the escalation of excise duty on locally manufactured products.

Additionally, the President has deferred the commencement date of the 2023 Finance Act from May 28, 2023, to September 1, 2023. Tinubu’s comprehensive reform agenda aims to address Nigeria’s economic challenges by tackling the debt burden, stimulating economic growth, curbing inflation, and enhancing security.

The success of these reforms will be crucial for Nigeria’s long-term development and prosperity

One of these orders suspends the five percent excise tax on telecommunication services, as well as the escalation of excise duties on locally manufactured products.

The announcement was made by Dele Alake, the Special Adviser to the President on Special Duties, Communications, and Strategy, during a press briefing at the State House in Abuja on Thursday.

In addition to the tax suspensions, President Tinubu also signed the Finance Act (Effective Date Variation) Order, 2023. This order defers the implementation of changes outlined in the Act, originally scheduled for May 23, 2023, to September 1, 2023.

The decision to delay the commencement date was made to comply with the 90-day advance notice requirement for tax changes outlined in the 2017 National Tax Policy.

Furthermore, President Tinubu signed The Customs, Excise Tariff (Variation) Amendment Order, 2023, which shifts the start date for tax changes from March 27, 2023, to August 1, 2023. This change aligns with the provisions of the National Tax Policy.

In a move to address environmental concerns, President Tinubu ordered the suspension of the newly introduced Green Tax, which imposed excise tax on single-use plastics such as containers and bottles.

Additionally, the import tax adjustment levy on certain vehicles has also been suspended.

Alake, the presidential spokesperson, clarified that these orders were issued to alleviate the adverse effects of tax adjustments on businesses and households in the affected sectors.

He reiterated the President’s commitment to addressing concerns related to multiple taxation and anti-business regulations.

Furthermore, Alake emphasized that President Tinubu’s administration remains dedicated to implementing business-friendly policies to support the growth of enterprises within the country.

The President reassured Nigerians that any future tax increases would only occur after extensive consultations within the framework of a comprehensive fiscal policy.

He emphasized that his administration aims to accomplish these goals by implementing budgetary reforms that stimulate the economy without causing inflation.

To promote domestic manufacturing and reduce dependence on imports, Tinubu stated that his industrial policy will employ a comprehensive range of fiscal measures.

Additionally, he emphasized the importance of improving accessibility and affordability of electricity for both businesses and households.

Tinubu pledged to nearly double power generation and enhance transmission and distribution networks. He also encouraged states to develop local energy sources.

Addressing concerns raised by local and foreign investors, Tinubu assured them that his administration would thoroughly review complaints related to multiple taxation and other barriers to investment.

He emphasized his commitment to ensuring that investors and foreign businesses can repatriate their dividends and profits back to their home countries.

Pantami disclosed this in a speech delivered at the third edition of Digital Nigeria Day on Monday. The speech highlighted some of the major milestones which

Today makes it 3 years since the Ministry of Communication and Digital Economy commenced the implementation of a Policy and Strategy for the development of a Digital Economy in Nigeria.

According to Pantami, the ICT sector provided 3 unprecedented contributions to the Gross Domestic Product (GDP) of the country in the last 3 years, namely 14.07% in Q1 2020, 17.92% in Q2 2021, and 18.44% in Q2 2022. At each time, these numbers are the highest ever contribution of the ICT sector to the GDP.  

“ICT sector grew by 14.70% in Q4 2020, making it the fastest-growing sector of the Nigerian economy in the last quarter of 2020 and the only sector to have grown by double digits. 

“This played a critical role in enabling Nigeria to exit the recession.  Furthermore,   the quarterly revenues also generated for the Federal Government rose from N51.3 billion to  N408.7 billion, through spectrum sales and taxes from the sector.”

Further, over 863,372 citizens benefited from digital skills programs and the Ministry has agreements with leading global companies like Microsoft and Huawei, to train millions of Nigerians.

When Pantami assumed office on the 21st of August 2019, the official broadband penetration figures stood at 33.72% and today it is 44.65%, representing close to 13 million new broadband users.

He noted that there were 13,823 4G base stations and now 36,751, representing a 165.86% increase.  The percentage of 4G coverage across the country also increased from 23% to 77.52%. 

Additionally, the cost of data has crashed from N1,200 per GB to about N350, making it easier for Nigerians to connect to the Internet.

“The quarterly savings from the IT projects’ clearance process rose from N12.45 million to N10.57 billion,” he noted

He said the government aims to create a pool of Innovation Driven Enterprises (IDEs) to accelerate the development of Nigeria’s digital economy.

“Through our efforts, 355,610 direct and indirect jobs were created. Privacy concerns are also being addressed through the newly established Nigeria Data Protection Bureau (NDPB).

“The drafting of the data protection bill has reached an advanced stage. The Digital Identity enrolments have also been very successful, with issued National Identification Numbers (NINs) rising from less than 40 million to over 90 million,” Pantami added.