Kenya: Government Steps Up Fight Against Cyber Crimes


Kenya: Government Steps Up Fight Against Cyber Crimes


28 May 2013

The government is developing a new plan to counter cyber crime to secure digital transactions and content and encourage investments in internet infrastructure, Permanent Secretary Bitange Ndemo has said. Speaking during the national cyber security forum held yesterday, the Information and Communications PS said there is need for a secure, reliable and efficient means of tackling cyber crime in the country.

“The government is in the process of developing a national cyber security strategy masterplan which will provide the government with a national level plan to defend and secure its digital infrastructure,” said Ndemo.


Communications Commission of Kenya director general Francis Wangusi said Kenya has recently had a surge in cyber crimes such as website defacement, impersonation on social media, email account hacking, cyber bullying, copyright infringement and mobile money transfer fraud.

“The local banks have increasingly become targets of electronic fraud,” said Wangusi. The planned cyber security strategy will recommend cyber security standards for the country’s ICT sector. CCK’s director for ICT Michael Katundu said: “banks are suffering quietly.”


Katundu said the use of weak passwowrds such as one’s name and birthday and sharing of PIN numbers has greatly compromised online and mobile banking transactions. Katundu added Kenya was in need of relevant regulations and laws that will support the fight against cyber crime. He said technical measures should be taken by the government to help this cause and recommended establishment of a national computer incidence response team.

Speakers at the forum called for faster implementation of this strategy especially because of the move to give laptops for primary school children who may become victims of cyber bullying or be exposed to pornographic sites.


Source: The Star, Kenya

Kenya launches Public Key Infrastructure Implementation


Kenya launches Public Key Infrastructure Implementation


20 May 2013

This week Kenya kicked off the process of setting up a National Public Key Infrastructure (PKI). Many may ask what PKI is, it a system of digital certificates, certificate authorities and other registration authorities that verify and authenticate the validity of each party involved in an electronic transaction. This will create a secure online transaction environment and set up an online identity & verification system. A National PKI will enable and foster the development of various applications incorporating digital signatures and a trusted environment over open networks.

Samsung Data Services, a global ICT service provider from Korea has been awarded the contract by the Kenyan Government to implement the National PKI. Not only has Samsung SDS implemented Korea’s PKI, but they have also implemented the same for the USA, Germany, Malaysia and Japan. With a population of 50 million citizens, Korea currently has 5 accredited Certificate Authorities (Certificate Service Providers) who have jointly issued over 28 million digital certificates.

Korea’s PKI has underpinned the implementation of e-Government systems and services. These include citizen oriented services such as national ID system, taxation; Spatial services such as land information system, underground facility management (gas, water, sewers, oil, electricity), property registration and urban planning among others.

Kenya’s National Public Kenya Infrastructure implementation is expected to be complete by November 2013.


Source: 140friday

Is Ghana Ready for a Cashless Economy?


Is Ghana Ready for a Cashless Economy?


4 June 2013

Various economies of the world are moving from the use of cash to a situation where digital  is applied. Is Ghana ready for this new revolution? FRED YAW SARPONG report.

It is getting clear that many countries in the world are switching from doing businesses by using physical cash to a situation where all transactions will be done by digital means. This is mainly common in developed countries and many other developing countries too have started implementing it. Cashless economy is what many call it.

It is an economy without cash, it uses digital money instead, and transactions are made easily. Or a cashless economy is one in which the purchase of goods and services and the payment of debts and remittances are done through electronic money media, (via credit cards, and debit cards, direct transfers from one account to another, visa cards, smart cards, mobile payment systems, and other technologies, etc.). In some years back, cashless society based mainly on barter, gift economics and debt, and then evolved to the use of money. In some countries like United State of America (USA), majority of the people use cards while little as 29% are still with cash. In Australian cash use still at 64% while in UK, cash use is projected to drop to 45% by 2018.

Ghana, as a developing country in West Africa has taken the initiative to introduce a system where businesses can be done without using physical cash. Bank of Ghana, the regulator of the banking industry through Ghana Interbank, Payment and Settlement Systems (GhiPPS) introduced e-zwich card, where Ghanaians will feel comfortable in using the card to transact businesses rather than physical cash.

Even though there has been several effort to educate the masses about the product, the education on this e-zwich have not go well with many Ghanaians. A lot of the citizens as of today do not even know there is something called e-zwich card. With a population more than half of it been illiterate, there must be a thorough education where all Ghanaians will understand and use the platform.

In Ghana, some of the common cards we can identify are such as Sika Card by SSB, Visa Horizon by Standard Chartered Bank (Stored Value cards), deployment of Automated Teller Machines (ATM) and ATM cards by banks eCard (CAL Bank, Ecobank) and among others. Advantages of using these platforms are that it reduces the cost of printing currency notes. It’s also cost less in transporting cash along the value chain from the Central Bank to banks to businesses and consumers.

According to Nigerian Central Bank Governor, Sanusi Lamido Sanusi, direct cost of cash management to the Nigerian banking industry is estimated to be N192 billion (approximately US$1.9 billion by end of 2012). The Central Bank of Nigeria introduced a new policy on cash-based transactions which stipulates a ‘cash handling charge’ on daily cash withdrawals or cash deposits that exceed N500,000 for Individuals and N3,000,000 for Corporate bodies. The new policy on cash-based transactions (withdrawals & deposits) in banks, aims at reducing (Not Eliminating) the amount of physical cash (coins and notes) circulating in the economy, and encouraging more electronic-based transactions (payments for goods, services, transfers, etc.).

It reduces the risks associated with transporting currency notes, both for banks and individuals (robbery, loss from fire or flood, etc.). Survey conducted by MTN Ghana office, indicated that 4 in 10 Ghanaians carrying cash more risky; 6 in 10 during travel and 1 in 10 Ghanaians using informal services had money stolen.

The use of this platform formalising informal transactions; transparency helps combat crime and corruption; record keeping reduces room for tax avoidance (eGhana); increased service options for consumers – accessibility 24/7. The net effect on business and economic growth through e-commerce, promote and enhanced productivity.

One area which stakeholders in the financial sector and for that matter the central bank have not done well at all is the Mobile Money Payment platform. Kenya is perfect example where over 80% of the Kenyans use M-PESA mobile money transfer. Many of the Kenyans are transacting businesses through this platform rather than using physical cash. Mobile Payments are defined as chain of payments that are initiated using mobile handsets and other devices, either to directly purchase or to authorize payment for goods and services. Mobile Payments has the potential to serve these unbanked and underserved segments of the society. Globally, just 37% banks provide some form of mobile banking service.

By the end of 2012, there were over 1 billion mobile banking users, conducting 47 billion transactions annually and generating over US$600 billion worth of financial transactions in the world, according to Ericsson survey.

At a forum recently in Accra to discussed cashless economy, the Managing Director of Ghana Commercial Bank (GCB), Mr. Simon Dornoo said the country will needs about 290,000 Point of Sale (PoS) terminals, valued at US$145 million to  push the country into the arena of a cashless economy. PoS terminals, which have been identified as critical to achieving the objective of e-electronic payments system, are electronic devices that enable customers to make payment to merchants in exchange for goods and services. He stated that a research had shown that globally, leading countries with e-payments system had an average of 2,200 PoS terminals per 100,000 adults.

“How do we finance this investment and what is the appropriate role of each stakeholder in the development of the electronic payments system,” he asked participants at the forum. “The payments infrastructure has expanded and banking systems are now interoperable so the conditions are right to move a lot faster to join those countries that have made significant progress towards this goal.”


Ebenezer Asante, MTN Sales and Distribution Executive recently said in a statement that given the benefits a cashless society affords us, it is important that we continue to do all we can to encourage a cashless economy based on technology. However, there are challenges we must resolve in order to chart a clear path forward.  We must focus on a number of key areas in the short and medium term. Some of these challenges involve policy, infrastructure and others.

Policy — We need clear policies in place that would allow us to follow a structured advance towards achieving the full benefits of a q2cashless economy, including a national policy that encourages more electronic-based transactions, while discouraging physical cash usage and circulation. He said a policy that prescribes a structured approach is a step in the right direction to a well thought-out, properly sequenced cashless economy implementation.

Infrastructure – We need to expand our infrastructure and systems to the point where we are ready for a cashless economy, and electronic transactions are truly ubiquitous and sustainable; so that everyone – retailer, service provider, consumer or business – can have the option to transact electronically regardless of location, or even time. According to him, this means that the technology coverage must be adequate, as well as other supporting structures such as energy availability for consistent connectivity and reduced downtime.

‘This tells us we must have a singular focus on educating people about the full benefits of a cashless economy. The benefits afforded them as well as the benefits afforded the country as a whole.  This is something that must be done by all stakeholders because as a country we all benefit,’ he added.


Perhaps government should consider using its own purchasing power to radically promote cashless payments as a first step. He explained that ‘when we consider the history of money, we realize that what we have today is the result of many years of innovation; innovations that have been in response to the changing needs of mankind and the need to find solutions outside our limitations.’ Comparing centuries ago and now, technology now offers us the opportunity to go back to being a cashless economy, albeit a more efficient one that is not based on barter and gift economics, but allows us fast, safe and convenient transactions.

‘We already carry our phones and our wallets wherever we go; why not use the telephone device and other smart cards as the medium of financial transactions, for the efficiencies we get from the ability to transfer money seamlessly, pay our bills and purchase goods and services without having to carry money around?’


Finally, he stated that Mobile Operators will facilitate each of these transactions directly or indirectly. Mobile Payments actually promotes financial inclusion. It has great potential to reach entirely new segments. Its lower costs make it profitable to serve poorer clients and no physical outlets make it possible to serve more remote clients.

In Ghana instead of the central bank adopt a policy and allow the banks in the country to take the challenge in handle mobile money; the telecom operators rather are championing it. And it has not been effective because only three operators out of six telecom operators are offering the services and there has been no policy direction with regard to these services. Among the six licensed telecom operators in Ghana, it is only MTN Mobile Money, Tigo Cash and Airtel Money are in operation.

With a clear policy in place, this initiative can be link to the rural banks in the country and it will become a nationwide project like M-PESA from Kenya. These platforms provide cash management solution which offers flexibility, total security and convenience of accessing your money on your mobile phone wherever you are. It offers a fledged bank account on your mobile phone which allows you to easily and safely manage your cash in real time.

With some of the platform you can send and receive money safely, pay your utility bills, TV subscription, buy airtime, pay for goods and services and buy a life insurance. They are currently partners with almost all the banks in Ghana. You can get a bank which is connected to one of these platforms. In total over 4.5 million are having services from these operators. The Mobile Money solution is based on Banking Industry security standards. Accounts are password protected, data is encrypted, user authentication is required, authorization is profile specific, and account holder confidentiality is assured. With these platforms, mobile money wallet opening is made to conform to Know Your Customer (KYC) requirements. The wallet will only be opened by Authorized Mobile Money Merchants.

In order to ensure that Mobile Money transfers are secured, a multiple authentication system is employed by the sender to validate a transfer. This involves the use of the Mobile number, transaction number and Personal Identification Number (PIN). The beneficiary will access the transfer with a unique and own profile. To access his/her wallet a user must authenticate that he/she is the account holder by entering a PIN. After consecutively entering wrong PIN three times (seizures of wrong PIN), the wallet is temporarily blocked. Before a subscriber interacts with a customer service officer, the subscriber will be required to identify himself/herself by answering unique authentication questions or by entering PIN on mobile.

Value proposition is based on four Pillars. They are convenience, accessibility, cost-effectiveness and trust. 

Despite all these positives about mobile money platform in Ghana, it challenges are lack of clear regulatory policies; partner banks involvement and support is low; lack education, awareness and acceptance of this mode of banking; most Ghanaians generally do not carry ID’s. This slows down registrations, especially in the rural areas; and limit on transactions.

Looking ahead we need clear policies as a country in place that would allow the operators to follow a structured advance towards achieving the full benefits of a cashless economy. It also needs Central Bank and the Government support in promoting this on relevant platforms. As a country we need to expand our infrastructure and systems to the point where we are ready for a cashless economy, and electronic transactions are truly ubiquitous and sustainable. The initiators and handlers need to be ensure with adequate security to avoid pitfalls i.e. cyber fraud is critical. Cultural resistance and education endorsement from Central Bank and Government will be of help.


Source: Fred Yaw Sarpong

Kenya: The trouble with KRA’s e-filing plans


Kenya: The trouble with KRA’s e-filing plans


13 June 2013

Kenya: The Kenya Revenue Authority ( KRA) is in the process of moving its tax system from a physical filing platform onto an electronic platform. Under this new system, data will be populated onto Excel templates by taxpayers or their agents, and uploaded onto the KRA database.

While the benefits of adopting an e-filing system are obvious, there are certain challenges that will arise. The major concern is privacy. Who will be able to access the system? How can one ascertain that no other party has access to the files? Are taxpayers’ records safe?

And then there is the technical issue. The level of detail contained on the electronic returns is unnecessary and superfluous, and the shift assumes that taxpayers are technically equipped to navigate through the returns. But the most challenging bit is the amount of time firms will take to complete these returns due to the excessive information that the KRA is asking for. Notwithstanding the system’s imperfections, we should not throw the baby out with the bath water.

A move to iTax is certainly a step in the right direction. That said, the change will not only be in the returns, but also in the mode of making tax payments. KRA is currently widening its reach by increasing the number of banks through which taxpayers can make payments.  Currently, taxpayers have to wait for payment receipts for almost a month to ascertain that their payment was received by the KRA.

Under the proposed system, once a taxpayer makes a payment to the taxman, it will be simultaneously reflected in the KRA system. The taxpayer will then be provided with a slip by the bank cashier showing that the  money has been remitted. The iTax  system is also expected to help improve  KRA’s record-keeping system with regards to filing and payments. It will make it easier to  retrieve evidence of document submission or payment remittance. It is, therefore, foreseeable that iTax will bring with it some merits.


Source: Standard Media

Uganda to tax mobile money transfers


Uganda to tax mobile money transfers


14 June 2013

Uganda is to impose a 10% tax on cash transfers by mobile phones and other money transfer operators. International remittances from Ugandans living abroad are also affected. Finance Minister Maria Kiwanuka said she also planned to raise $16.5m (£10.6m) by imposing a levy on incoming international phone calls. Ms Kiwanuka had to come up with ways to plug a $214m hole in the annual budget after donors cut aid over accusations of corruption.

The BBC’s Catherine Byaruhanga in the capital, Kampala, says there has been criticism that the budget – presented to parliament on Thursday – will hit poorer Ugandans hardest. Ms Kiwanuka told MPs that in the last year $767m worth of remittances had been received from Ugandans in the diaspora. According to Uganda’s private Daily Monitor newspaper, the new mobile money transfer tax could affect the 8.9 million customers using six mobile phone networks in Uganda. The government hopes to raise $12m annually from the tax, it reports. Mobile money transfers are extremely common in Uganda as many people, especially in rural areas, do not have bank accounts. Transfers are used to send money to relatives and even settle some bills.

“It’s very unfortunate that Ugandans are being squeezed both ways,” Simon Mpagi, a mobile phone money transfer agent, told the Reuters news agency from his retail shop in Kampala.

“They steal our taxes and donor money… leaving public services to near-collapse and now when donors get angry and cut them off, then they come to us and punish us again by raising taxes to grab even the little income we struggle to make.”


Phiona Wall, communications manager at mobile phone company Airtel Uganda, said she felt there were contradictions in the budget.

“In telecom we are trying to increase affordability and things like mobile money transfer revolutionised money transaction so when you increase tax, there is a contradiction,” she told Uganda’s state-owned New Vision newspaper.


David Holliday, managing director of Uganda Telecom, said the new tax would mean a significant increase in the cost of the service.

“Mobile money has become part of people’s everyday lives because they don’t need to carry cash. Even those who were formally unbanked have mobile money accounts with a service provider of their choice because it’s cheap,” the Daily Monitor quoted him as saying.


Ms Kiwanuka said the aim of the budget was to target those who avoid or do not pay taxes and set targets for the revenue authority to make sure taxes are actually collected.

“All the tax proposals that have been mentioned add up to about 3% of existing taxes and they’re still subject to parliamentary approval,” she told the BBC.

“That percentage shows you that really the budget is not about new taxes, it’s about… taxes already due be paid. Collecting the uncollected.”

The UK, Denmark, Ireland and Norway have all suspended some aid to Uganda following allegations that millions of dollars had been transferred from Prime Minister Amama Mbabazi’s office into private accounts.


Mr Mbabazi has acknowledged that money has been stolen from his office, but denies any involvement. The stolen money has been returned.


Source: BBC

Zimbabwe: Mobile, Internet Money Surpass Card Payments


Zimbabwe: Mobile, Internet Money Surpass Card Payments


19 July 2013

MOBILE and internet-based transactions have for the first time surpassed card payments after registering a 28,3% growth in the month of May as more account holders turn to the convenience of mobile banking.

According to the Reserve Bank of Zimbabwe (RBZ)’s May 2013 monthly economic review, the value of mobile and internet-based transactions rose from US$283,6 million in April to US$364 million in May 2013, while the total value of card-based transactions rose by 1,3% from US$328,2 million in April to US$332,6 million in May 2013. Many banks moved towards internet and mobile banking after government said banks should, effective January this year, not levy fees on deposits of less than US$800 and give 4% interest on deposits of at least US$1 000 held over 30 days.

This resulted in an outcry by banks who had been earning most of their income from fees and commisions.

The biggest mobile banking product on the market is Econet Wireless’ EcoCash with more than 1,7 million subscribers as of December 2012 and expects to push in more than US$1 billion on its platform in the 12 months to August 2013. EcoCash allows people to send money to each other from cellphones and to collect the cash from a network of about 3 000 agents. The mobile operator integrated the system through various major banks which include CBZ Bank, Steward Bank and Stanbic Bank. His has allowed those with existing bank accounts to move money in and out of banks without entering a banking hall.

EcoCash has also facilitated provision of banking services to millions of people who until now were outside the banking system. Telecel discontinued its mobile money service in 2011 but subscribers can still access mobile banking through a ZimSwitch platform run by another company while Net One’s mobile money transfer service, One Wallet, has proved to be a success. Earlier this year, FBC Holdings also entered the fray with the planned expansion of its own mobile banking product, Mobile Moola. In an overall comment, the RBZ said the national payment systems continued to exhibit stability and resilience during the period under review.

“With the exception of cheques, most payment streams registered increases during the month of May 2013, in both volume and value terms,” the Central Bank said.


In value terms, cheque transactions decreased by 7,2%, from US$16,6 million in April 2013 to US$15,4 million in May 2013. The value of transactions processed through Zimbabwe Electronic Transfer Settlement System (ZETSS) in May 2013 increased by 10,7% to US$3,91 billion compared to US$3,54 billion in April 2013. In terms of volumes, transactions registered on the ZETSS increased by 18% from 182 865 to 215 199 during the same period.

Going forward, the RBZ said its goal is to ensure payment systems are available without interruption, meet all users’ needs, and operate at minimum risk and reasonable cost.

“As such, the central bank will continue to deepen its role through increased monitoring and collaboration with various stakeholders in order to maintain safety, soundness and stability in of the payment systems,” the RBZ added.


Source: Zimbabwe Independent

Mobile Money Market to Reach $278.9 Billion by 2018


Mobile Money Market to Reach $278.9 Billion by 2018


July 29 2013

Dallas, TX, According to a new market research report “Mobile Money Market: (Mobile Payments, Mobile Remittance, Mobile Banking & Mobile Commerce) – Advanced Technologies, Value Chain, Adoption Trends & Worldwide Market Forecasts (2013–2018)”, are forecasted with detailed segmentation: based on the transaction mode ( NFC/ Smart cards, Direct operator billing, Mobile Web / WAP, SMS and others), based on payment location ( Remote payments, Proximity payments), Based on nature of Payments ( Person to Person (P2P), Person to Business (P2B), Business to Person (B2P), Business to Business (B2B) and based on type of purchases (Air time transfers & Top Ups, Money Transfers and Mobile Payments, Merchandise & coupons, Travel Ticketing & Food, Digital products purchases).


– 112 Market Data Tables
– 61 Figures
– 272 Pages and In-Depth Table of Content on “Mobile Money Market”

Early buyers will receive 10% customization on this report.

The mobile phones, which are seen as the device for the upper crust is changed and the number of mobile phones is expected to surpass the world’s population in the coming years. The Ubiquity of mobile phones and the major chunk of people who have no formal access to banks are the key drivers for the Mobile Money market. Mobile Money will offer a rewarding opportunity in terms of revenue for the people in its ecosystem both in the near future and over the long term. While talking about its ecosystem, it constitutes of many industries such as mobile network operators, banks and financial institutions, payment processors, mobile money platform providers, handset manufacturers, etc. because of its fragmented nature of the market.

The report also discusses the total Mobile Payments in terms of transaction value, total mobile money users and the active mobile money users forecast trends. The mobile transaction value is segmented based on industry verticals such as Banking and Financial Services, Telecommunicaiton, Media and Entertainment, Hospitality, Consumer Goods & Retail and Other verticals. MarketsandMarkets also forecasted the Installed base and unit shipments for NFC enabled devices over the period of 2013 -2018. The global Advancements, Business Models, Drivers, Restraints and Opportunities are also presented in the report.

Mobile Money Market is expected to grow from $13.8 billion in 2013 to $278.9 billion by 2018, at an estimated CAGR of 82.4% over the same period.

About MarketsandMarkets

MarketsandMarkets is a global market research and consulting company based in the U.S. We publish strategically analyzed market research reports and serve as a business intelligence partner to Fortune 500 companies across the world.

MarketsandMarkets also provides multi-client reports, company profiles, databases, and custom research services. MarketsandMarkets covers thirteen industry verticals, including advanced materials, automotive and transportation, banking and financial services, biotechnology, chemicals, consumer goods, energy and power, food and beverages, industrial automation, medical devices, pharmaceuticals, semiconductor and electronics, and telecommunications and IT.

We at MarketsandMarkets are inspired to help our clients grow by providing apt business insight with our huge market intelligence repository.

Ethiopia: Electronic System to Replace Plastic Mobile Top-Up Card


Ethiopia: Electronic System to Replace Plastic Mobile Top-Up Card


12 January 2014

Kifiya Financial Technology Plc (KFT) is working with ethio-telecom to introduce an electronic airtime distribution service. This will be designed to be a cheaper replacement of the existing scratch cards used for prepaid mobile customers.
Ethio telecom’s Corporate Communications director, Abdurahim Ahmed, declined to make any comment, but the service could become a reality in two weeks, according to Eyob Getahun, Public Relations head at Kifya. When launched, the electronic airtime distribution service will replace the common scratch cards. The very objective of the project is to cut down on the foreign currency spent on the purchase of the plastic mobile airtime cards. Although the paper airtime recharging e-cards will also be imported, their cost will be significantly less, says Kifya.

“The cost of the scratch cards is too high and cards need complex printing and complicated distribution networks,” Eyob Getahun, public relations officer of Kifya, said. “On top of that, they are not environmentally friendly.”


Unlike with the current scratch card, the pin number would be printed on paper from an e-card terminal. These would be designed to print the numbers from data stored on ethio-telecom’s server online, using a private network GSM (Global Station for Mobile Communication). The terminal owner would insert a password and username to print the airtime required, and sell it on the spot.

“Through the studies, it has been proven that the project is viable,” Eyob said. “Kifya will, thus, implement the new scheme soon.” 


Abdurahim Ahmed, the corporate communications director at ethio telecom, did not comment to Fortune, despite repeated efforts. Ethio-telecom has so far been availing scratch cards worth five Birr, 10 Br, 15Br, 25Br, 50 Br and 100Br only. The new service will, however, provide customers with the option of recharging any amount. Fortune has learnt that Kifya has recruited new staff from its branches and has been offering them training at its headquarters at the Finfinnee Building, around Meskel Square. The agreement with ethio-telecom is expected to evolve into a scheme in which private vendors will lease airtime from them to distribute to customers.
Established in 2010, Kifya runs the 31 Lehulu centres and provides one window electronic billing service to 1.1 million bill paying customers to pay their water, electric and telephone bills
Source: allAfrica

Digital Taxation: It’s happening


Digital Taxation: It’s happening


31 January 2014

By now, you’ve all probably heard very much about the news that the government plans to implement taxation on digital purchases made from within South Africa. Yes, your government wants even more of your money. It is unfortunately true, and as of April 1, if government gets its way both physical and digital goods you buy online will be subject to the 14% VAT we already pay on everything.
This includes thing you buy from Google’s play store, Apple’s iTunes, XBox Live’s marketplace, PSN and yes, even Steam – so you best start getting ready to cough up even more for your games and digital services. What? Digital services too? Yup, things like Netflix, Paypal, Unotelly, or whatever other services you pay for will cost you even more. Want to buy an eBook, or book an online course? Yup, that’ll cost you more too.
Here’s a list of everything you’ll be required to pay VAT on:
Educational services

  • distance teaching programmes;
  • educational webcasts;
  • internet-based courses;
  • internet-based education programmes; or
  • webinars,

Games and games of chance

  • internet-based games, including any electronic game or multiplayer role-playing game;
  • interactive games, such as games of chance, where the result is influenced by the skill of the player;
  • electronic betting or wagering.

Information system services
Internet-based auction service
Maintenance services
Which refers to technical support relating to

  • blogs;
  • databases;
  • information systems;
  • information system services; and
  • websites.

Online content

  • e-books, which means any digitised content of any book or electronic publication;
  • films, which means any broadcast, documentary home-made video, live streaming performance, movie, music video, program, television series, or video
  • images, which means any desktop theme, photographic image, pictorial image, or screensaver,
  • music, which means any audio clip, broadcast jingle, live streaming performance, ringtone, song, or sound effect,
  • software, including apps, system software, or plugins, and any update to these programs.

Subscription services
Any subscription service to:

  • blogs;
  • databases;
  • information system services;
  • journals;
  • magazines;
  • newspapers;
  • games;
  • social networking services;
  • webcasts;
  • websites;
  • web applications; or
  • web series.


The only way to implement this realistically, is to have it done automatically by banks when you make purchases, or require that services such as Steam comply with Vat regulation, which means they’d need to be registered VAT vendors. Do you really think all of the international companies you buy from are going to register for that? Not a chance in hell; instead, I suspect it just means we’ll be geofenced off from everything. In the end, it’ll mean you may as well say goodbye to the open market on the internet – and hello to a lot more digital piracy.
Piracy is driven more by ease of access than cost, and if everything’s blocked, it makes sense that media consumers will look elsewhere for that content.

Why digital tax is good for South Africa


Why digital tax is good for South Africa


10 February 2014

Legal expert Graham Gilfillan welcomed the South African government’s new electronic services regulations which will introduce 14% VAT on digital products and services from 1 April 2014. The regulations have been published by finance minister Pravin Gordhan for comment, and follow the proposals he made in his 2013 budget speech to impose VAT on foreign businesses who “sell e-books, music and other digital goods and services”.

According to Gilfillan the new digital tax is a very good thing. He explained that money from digital purchases often leave the country without any benefit to South Africa’s economy.

“Since when is not paying tax okay,” asked Gilfillan. “This issue of not paying tax on consumer goods is out. It is hurting our economy terribly.” “This is really targeted at the foreign e-sellers, who are killing South African jobs, who are killing South African businesses, because what do they contribute to the economy?”

According to Gilfillan, foreign online shopping has been hurting South Africa, and it is not only about tax.

“Imagine all the South African authors, musicians and software programmers – how do they get their money back?” asked Gilfillan.


Increase in money in economy

Gilfillan said that the new digital tax will definitely have a “massive” positive effect on the local economy. He said that many people may be using Netflix or Hulu at the expense of local operations like DStv. The money flows out of the country without any benefits for local artists or content products, said Gilfillan, adding that no royalties are flowing back into the country.
Gilfillan said that it is unfair for a foreign content provider to offer products without any tax, undercutting local businesses which have to charge VAT on their products.
Source: Business Tech