Weekly digest for 4 June 2021
KEY READING FOR THE WEEK
This week’s main story is a brief summary of the status of the global corporate tax negotiations amongst G7 countries that are currently ongoing and expected to conclude on Saturday, June 5. One of the sticking points in the negotiation is the removal of country-specific digital taxes. Britain, Italy, Spain, Turkey, India and Austria have introduced digital taxes that the US sees as discriminatory against US companies. The USA has said it would impose 25% tariffs on a range of goods from these countries if the digital taxes are not removed as part of the current negotiations on corporate tax. There are 2 components to the proposed global corporate tax regime: 1) countries get the right of taxation over the share of profits generated in their jurisdiction by a multinational headquartered outside of their country, and 2) there is a minimum corporate tax rate for multinationals with revenues above a certain threshold. Aside from the digital tax discussions, one sticking point is the minimum rate. At the moment, consensus seems to be building on a minimum rate of 15% but this is higher than what some countries offer (e.g. Ireland’s corporate tax rate is 12.5%). A second sticking point is at what threshold companies would have to comply with the new global corporate rate. We’ll provide an update next week as the G7 negotiations conclude.
OTHER WEEKLY NEWS FROM AROUND AFRICA
- Tanzania: Airtel Africa has sold its tower portfolio for about $175 million to a subsidiary of SBA Communications. Airtel Tanzania will lease back the towers from SBA.
- Tanzania (again): The Tanzanian Communications Regulatory Authority has released a tender for a public/private partnership to build smartphones in Tanzania. It’s a mystery why Tanzania believes it can supply smartphones at cheaper prices than manufacturers like Techno or Samsung. Rather than wasting money, it would be more beneficial to remove excise taxes and VAT from smartphone imports.
- Fibre: Liquid Intelligent Technologies has hit the 100,000km fibre network milestone. According to Liquid, over 643 towns and cities are connected on the continent.
- Ethiopia: The Geospatial Information Institute in Ethiopia has said that it will disseminate geo-spatial data via a single gateway. The lack of reliable and up-to-date geo-spatial data is a major problem in Africa. Hopefully, this latest initiative will provide open access to data to researchers. This sort of data is really useful for assessing the extent of mobile signal coverage and Ethiopia has very little public information at the moment.