This year is expected to witness the much awaited deployment of the fifth generation (5G) technology. Meta has put small businesses that use its various channels to advertise to brace for the payment of 7.5per cent VAT, while cybercrimes may continue if the crushing poverty and youth unemployment ravaging the country are not addressed, writes LUCAS AJANAKU.
The deployment of the fifth generation technology (5G) early this year is expected to dominate the information communication technology (ICT) space.
The Minister of Communications and Digital Economy, Prof Isa Pantami, had given assurance about early deployment of the technology during the fourth quarter (Q4) last year.
Preparatory to the deployment, the National Frequency Management Council (NFMC) chaired by Pantami had approved the release of 3.5gigahertz (GHz) spectrum for the deployment of the technology. After a successful mock auction, the final bid round to auction the spectrum was conducted at Transcorp Hotel, Abuja.
Three firms competed: MTN Nigeria, Airtel Nigeria and Mafab Communications Ltd.
After 11 rounds of bidding that lasted for about eight hours, Mafab Communications Ltd and MTN Nigeria Plc, emerged winners of the spectrum auction.
The three companies had qualified for the auction, having met the requirements stipulated in the Information Memorandum (IM) for the spectrum auction. They had also participated in a mock auction preparatory to the real auction.
In the first Round of the auction, the bid price was fixed at $199,374,000.00; $201,367,740.00 at second Round; $204,388,356.10 at third Round; $209,407,962.50 at fourth Round and $215,782,901.30 at the fifth Round.
The auction prices increased progressively to $224,414,217.43 at the Sixth Round; $231,146,643.96 at the seventh Round; $240, 392,509.71 at the eighth Round; $251, 210,172.65 at the ninth Round; and $263,700,050.00 at the Round 10 of the auction exercise.
The auction process attained its peak at Round 11 when the bid price graduated to $275,904,886.25 with all the three bidders still actively participating. The Main Stage of the Auction, however, ended at the conclusion of the 11th Round, with Airtel listing an exit bid of $270,000,000, while MTN posted an exit bid of $273,000,000, giving way to the Assignment Stage. At this point, Airtel had dropped off from the race having posted a lower exit bid, thus leaving Mafab and MTN as winners of the two available lots.
The Executive Vice Chairman of NCC, Prof Garba Danbatta, expressed satisfaction that the auction process was efficient, fair, credible, well-organised and transparent and was designed to deliver the ideal outcome.
Twitter ban
This year, the Federal Government is expected to lift the indefinite suspension slammed on Twitter, a microblogging social site, last year.
The ban was imposed on the platform when it pulled down a tweet by President Muhammadu Buhari threatening to speak to secessionist group with the language they understand.
The ban has continued to cost the country huge cash running into several billions of naira since it came into effect on June 4, 2021.
Minister of State for Labour and Employment, Festus Keyamo, had said the dialogue to lift the ban on Twitter was in progress with few conditions yet to be met.
The government had assured that the ban would be lifted “just a few more days” in September but was never to be till the year ended.
He said Twitter has agreed to all the government’s conditions but singled out “timelines” as the only hiccup.
“It was Twitter, just to put it in context, that reached out to the Federal Government to say they want to know what they can do to straighten up the relationship with the Federal Government. And so we’ve gone far. What is left now are the timelines to fulfill those conditions.
“Once those timelines come and they fulfill those conditions, Twitter will be back to business in Nigeria. They know exactly what we want. And these are things that are extremely altruistic,” Mr Keyamo had said.
He said the social media giant has agreed to pay taxes to the government as well as set up a physical office in Nigeria where users can take their complaints to.
Twitter had earlier stirred a debate in Nigeria when it announced its decision to set up its regional headquarters in Ghana rather than Nigeria where it enjoys more patronage.
It cited “free speech, online freedom, and open internet” among its reasons, something that irked government officials.
“So, they’ve agreed to taxation, they’ve agreed to open an office in Nigeria so that there can be some, you know, face to face complaints so that we don’t have to be going through algorithms to complain about activities of certain persons who use Twitter to subvert the government of the day.
“There are certain lines that people should not cross when sending out messages, or tweeting things that are capable of tearing us apart. For instance, things are not capable of setting this country on fire, you know, but to use those platforms to promote and propagate some of these ideas,” Mr Keyamo had said.
The directive was promptly carried out by the telecommunication companies the next day, following a formal instruction from the NCC to that effect.
NetBlocks Cost of Shutdown Tool estimates that Nigeria’s economy loses N104.02million ($250,600) every hour to the Twitter ban.
Twitter, Facebook, Google, others to pay tax
The Senate has passed the Finance Bill 2021, transmitted to the National Assembly by President Buhari, on December 7, 2021.
The passage of the bill followed the consideration of a report by the Senate Joint Committee on Finance; Customs, Excise and Tariff; Trade and Investment.
One of the major highlights of the Bill is the aspect empowering the Federal Inland Revenues Service (FIRS) to assess non-resident firms such as Twitter, Facebook, Google, and Netflix, among others.
They are to be taxed on fair and reasonable turnover earned from digital services to Nigerian customers.
The Finance Bill further mandates FIRS to appoint persons for the purpose of collection and remittance of non-resident taxes.
Chairman of the Joint Committee, Senator Solomon Adeola, said the Bill sought to support the implementation of the 2022 Federal Budget of Economic Growth and Sustainability by proposing key specific taxation, such as Customs Duties, fiscal charges and other relevant laws.
He said a total of 12 Acts were amended under the Finance Bill which contained 39 clauses.
He said the Bill sought to promote fiscal equity, align domestic tax laws with global best practices, introduce tax incentives for infrastructure and the capital market and support small businesses with a view to increasing government’s revenue.
“The Finance Act 2020 was predicated essentially on having no new taxes and no new incentives due to the COVID-19 impact on the economy, as such, it was structured across four broad thematic areas; Enacting counter cyclical measures and crisis intervention initiatives; Tax, fiscal responsibility and public procurement reforms; Reforming fiscal incentives policies for job creation; ensuring closer coordination of monetary, trade and fiscal policies and Enhancing tax administration,” Adeola had said.
The committee based on its observations, recommended five per cent Capital Gains Tax to be imposed on shares’ disposal transactions where gains exceed N250 million in 12 months.
It recommended that Gaming and Lottery companies be taxable, as it applies to oil and gas companies.
The Bill underscored the need for midstream and downstream oil and gas companies to be liable to corporate tax, without the benefit of tax exemptions for firms exporting goods to earn foreign exchange.
The Bill equally sought more powers for the Federal Inland Revenue Service (FIRS) to collect the Nigeria Police Trust Fund (NPTF) levies on Nigerian companies and to streamline tax, levy collection from Nigerian companies in line with the administration’s ease of doing business reforms.
The Bill further empowered FIRS to assess and tax non-resident firms on fair and reasonable turnover basis on revenue earned from digital services to Nigerian customers, with a further mandate to appoint persons for the purpose of collection and remittance of non- resident taxes.
The committee sought reforms on securities lending transactions, minimum tax for insurance companies and companies in general, taxation of unit trust income, real estate investment trust, and insurance companies capitali sation by National Insurance Commission (NAICOM in line with tax equity.
It advised the government to mandate FIRS as principal tax revenue collection agency, to collaborate with law enforcement agencies and ministries, department and agencies (MDAs) in streamlining tax collections by enhancing public financial management reforms.
According to the joint committee, doing so would reduce revenue leakages and better track actual expenditure to revenue performance in line with the provision of the 1999 Constitution of the Federal Republic of Nigeria (as Amended), Fiscal Rules and other Extant Money Acts.
The committee demanded an increase of 0.5 per cent in education tax, pushed for close monitoring of unfolding development and policies on VAT, tax incentives, projected increase tariff on tobacco, alcohol and carbonated drinks to fund vital expenditure on health, education and security, with the possibility of introduction of new taxes, tariffs and levies as the economy recovers.
7.5% VAT on Facebook ads
Facebook now Meta said Nigerians will now pay 7.5 per cent value-added tax (VAT) on all ad placements from January 1, this year.
In a statement, it said the charge will apply to those buying ads for businesses or personal purposes.
“Due to implementation of a value-added tax (VAT) in Nigeria, Facebook is required to charge VAT on the sale of ads to advertisers, regardless of whether you’re buying ads for business or personal purposes.
“All advertisers with a business country of Nigeria will be charged an additional 7.5% VAT on advertising services purchased beginning 1 January 2022,” the statement said.
It added that those exempted from VAT would be able to recover the fund if they provided their tax ID.
“If you’re registered for VAT and provide your VAT ID, your VAT ID will show up on your ads receipts.
“In the event that you’re entitled to recover the VAT, this may help you recover any VAT you paid to the Nigerian tax authorities if you are a VAT registered business in Nigeria,” Meta said.
The big tech is the parent company of Instagram, FB Messenger, and Facebook, all social media channels.
The new 7.5 per cent VAT charge will also apply to Instagram ads.
Cybercrooks
As poverty and youth unemployment continue to ravage the economy, cybercrooks will not relent in their trade this year. They will steal people’s identities and data with a view to cleaning up their bank accounts.
According to the National Bureau of Statistics (NBS), unemployment rose from 27.1 per cent to 33.3 per cent from December 2020 to March 2021. An online platform, statista, said unemployment was estimated to reach 32.5per cent. This figure is projected to increase further this year while the World Bank said unemployment rate rose five-fold in the last 10 years; from 6.4 per cent in 2020 to 33. 3per cent at the end of 2020. The bank said about 5.6million people were pushed to below poverty line last year as a result of government policies which made inflation to hit stratospheric heights.
Its Lead Economist for Nigeria, Dr. Marco Hernandez, had said: “Right now, Nigeria is growing at a slow rate with a high rate of inflation. About 5.6 million Nigerians have been pushed below poverty line within one year. Inflation is driven by increasing domestic food prices and not imported food prices. Exchange rate reforms are essential to reduce inflation and to boost growth; and inflation follows the movements in the parallel foreign exchange rate.”
The situation is expected to get worse this year as the government implements fuel subsidy removal, tax increase and many more.
But the NCC said it has taken measures against the ramparts of the criminals. It advised telecoms consumers to be wary of the activities of internet fraudsters and associated risks to phone users.
Director, Consumer Affairs Bureau at NCC, Mr. Efosa Idehen, who gave the warning on the prevailing threat posed by cyber fraudsters, especially in banking system, said the crooks have shifted to the telecommunication sector.
Efosa, who spoke at a sensitisation forum, said attackers are also targeting telecom networks with the intent of getting access to consumers’ information in the data bank of service providers. He warned consumers on the risk inherent in SIM swaps, Unstructured Supplementary Service Data (USSD) and e-payment, among other critical areas susceptible to cybercrime. He stressed that telecom sector is no longer spared in the raging storm.
He cautioned consumers not to open unfamiliar emails or respond to unfamiliar inquiries while urging them not to hesitate to report suspicious propositions to their banks and telecom service providers.
Efosa said collaboration is being established with the Central Bank of Nigeria (CBN), Economic and Financial Crimes Commission (EFCC), Independent Corrupt Practice and other related Commission (ICPC) and other relevant agencies to curtail the fraudsters’ menace.
He reassured of NCC’s mandate to protecting and promoting consumers’ interests, adding that the commission would sustain awareness creation and public education on telecom fraudsters to guard against falling prey.
He said: “The development and deployment of robust infrastructure to support innovative technologies and services has no doubt positively transformed our socio-economic space. Today, telecom consumers are enjoying broadband and other service driven by the quest to establish a digital economy.
“As the telecom industry evolves, there are growing concerns over the rising trend of fraud perpetrated on telecom platforms across key sectors of the Nigerian economy. The menace, which follows wide acceptance of new methods of mobile money and electronic banking and payment systems, has been discovered to cost the country whopping sums.
“A lot of people have learnt the hard way how losing their phones and vital information to fraudsters can lead to devastating theft of the money in their bank accounts. These fraudsters do this by stealing victims’ identities— name, address, bank information, which they use in gaining access to their victims’ bank accounts.”
Last year, the NCC also raised the alarm over the existence of a hacking group orchestrating cyberespionage in the African telecoms space.
An Iranian hacking group known as Lyceum (also known as Hexane, Siamesekitten, or Spirlin) has been reported to be targeting telecoms, Internet Service Providers (ISPs) and Ministries of Foreign Affairs (MFA) in Africa with upgraded malware in a politically motivated attack oriented in cyberespionage.
Information about this cyber-attack is contained in the latest advisory issued by the Nigerian Computer Emergency Response Team (ngCERT) which rated the probability and damage level of the new malware as high.
According to the advisory, the hacking group is known to be focused on infiltrating the networks of telecoms companies and ISPs. Between July and October, 2021, Lyceum was implicated in attacks against ISPs and telecoms organisations in Israel, Morocco, Tunisia, and Saudi Arabia.
The advanced persistent threat (APT) group has been linked to campaigns that hit Middle Eastern oil and gas companies in the past. Now, the group appears to have expanded its focus to the technology sector. In addition, the APT is responsible for a campaign against an unnamed African government’s Ministry of Foreign Affairs.
By the attackers’ modus operandi, Lyceum’s initial onslaught vectors include credential stuffing and brute-force attacks. So, once a victim’s system is compromised, the attackers conduct surveillance on specific targets. In that mode, Lyceum will attempt to deploy two different kinds of malware: Shark and Milan (known together as James).
Both malwares are backdoors. Shark, a 32-bit executable written in C# and .NET, generates a configuration file for domain name system (DNS) tunneling or Hypertext Transfer Protocol (HTTP) C2 communications; whereas Milan – a 32-bit Remote Access Trojan (RAT) retrieves data.
NCC said both are able to communicate with the group’s command-and-control (C2) servers. The APT maintains a C2 server network that connects to the group’s backdoors, consisting of over 20 domains, including six that were previously not associated with the threat actors.
According to reports, individual accounts at companies of interest are usually targeted, and then once these accounts are breached, they are used as a springboard to launch spear-phishing attacks against high-profile executives in an organization. The report suggests that not only do these attackers seek out data on subscribers and connected third-party companies, but once compromised, threat actors or their sponsors can also use these industries to surveil individuals of interest.
NIN-SIM linking
It is also hoped that the Federal Government will continue its campaign to capture more people into the National Identity Data Base (NIDB) and link their unique National Identity Number (NIN) with their Subscriber Identity Module (SIM) card.
Prof Pantami said the National Identity Management Commission (NIMC) has so far captured over 71 million people into the NIDB without getting additional cash from the Federal Government.
The deadline given by the Federal Government for subscribers to link their SIM with NIN expired on Friday Dec 31. The government has once again extended the exercise to March 31 this year.
Announcing the extension, Prof Pantami said as at December 30, last year, NIMC had issued over 71million unique NINs with between three and four SIMs linked to one NIN.
Currently, there are over 101million subscribers that are yet to do the verification.
President, National Association of Telecoms Subscribers (NATCOMS) Deolu Ogunbanjo said it is just fair that the deadline is extended.
He said the Independent National Electoral Commission (INEC) just came out to say there are 301 communities without internet access. He said such communities will certainly be unable to sync their SIM with their NIN.
He urged the Nigerian Communications Commission (NCC) to liaise with the Association of Licensed Telecoms Companies of Nigeria (ALTON) to ascertain the extent of work that has been done in the NIN-SIM sync campaign.
Ogunbanjo said if the carriers have succeeded in linking between 80 and 85 per cent of phone users in the country, the Federal Government could then proceed to disconnect defaulters from the network.
According to the NCC data, there were 229,582,206 connected lines in the country in October, and only 191,618,839 lines were active.
The government has extended the SIN-NIN sync timeline more than four times. Announcing the October deadline extension, the NCC and NIMC had in a joint statement, said 66 million unique NINs had been captured so far.
The decision of the government to stop the sale of new SIM cards and imposition of stringent SIM registration measures for security reasons had taken a terrific toll on the fortunes of the carrier as well as the growth of the telecoms sector.
Analysts say in spite of these measures, kidnap-for-ransom has become a flourishing business in the country while the mobile phones are brazenly used to negotiate ransom payment.
It is hoped that the NIN-SIM deadline will be further extended this year so as not to destroy income stream of millions of Nigerians and snap family ties.
