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| November 15, 2018

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Apple continues its year of price hikes

November 4, 2018 |

When the $ 1,000 iPhone X was announced last year, Apple watchers gasped: Can the company possible get away with charging that much for a phone?
CNN.com – RSS Channel – World

Consumers, get ready for price hikes if China trade war ratchets up, report says

October 30, 2018 |

The next round in the U.S.-China trade war could be the costliest one yet for American consumers.

The U.S. is said to be preparing to announce tariffs on all remaining Chinese imports by early December, according to several people familiar with the matter — and Citigroup economists are projecting…


L.A. Times – Business

Wave of Mobile Tax Hikes Squeeze Africa’s Poor to Indulge Governments

October 3, 2018 |

Wave of Mobile Money Tax Hikes Squeeze Africa’s Poor to Spoil Governments

A smart robber fleeces you with a pen and a handshake. From Zimbabwe to Kenya, Uganda to Benin, African governments are on a tax-raising spree, looking for easy money, ostensibly to help fund successive revenue shortfalls and budget deficits. Often, the money ends up being misappropriated by corrupt public officials. The best weapon in government hands is now your mobile phone – the closest thing most citizens in the continent have to a functional bank account.

Also read: Banks, Money Mules And Front Companies Aid Terrorists in Conflict Zones Launder Money

Milking the Poor: African Governments Enforce a Raft of New Taxes on Mobile Money

Faced with the informalization of the economy and a record increase of mobile money transactions, as citizens pull their own weight against unemployment and financial exclusion, taxmen in Africa have pitched up on the last frontier, punishing the poor who are often denied cash rewards for their labor.

Wave of Mobile Money Tax Hikes Squeeze Africa’s Poor to Spoil Governments

In Zimbabwe, finance minister Mthuli Ncube this week increased taxes on mobile money transfers to 2% on each dollar from the previous flat 5% on the amount transferred, joining an expanding list of African governments intent on squeezing every dollar from impoverished citizens.

The new tax looks like a reduction. It is not. It is a rise in all costs for every transaction. For every dollar spent, Zimbabweans now have to pay 2 cents. In the past, they paid only 5 cents for every transaction, including those exceeding $ 1. With 96% of transactions in Zimbabwe done electronically, the new tax means that citizens, already battling severe cash shortages, will have to pay more each time they buy bread or fuel or transfer money to a relative, by mobile or bank. The latest increase doesn’t account for the 15% VAT levied on goods and services, and a slew of taxes already charged by mobile carriers and banks, such as balance enquiry.

It also means easy revenue for the government. So far this year, cashless transactions have reached 1.7 billion, said the finance minister, compared to just 50 million four years earlier. That’s the equivalent of $ 64 billion moved via mobile phones and other electronic means by the end of June, according to data from the Reserve Bank of Zimbabwe. If the 2% on every dollar is applied, state coffers will get a boost of $ 1.28 billion.

“There is need to expand the tax collection base and ensure that the tax collection points are aligned with electronic mobile payment transactions and the real time gross settlement system,” Ncube said, in a statement on October 1.

Unholy Alliance

Zimbabwe joins several other African countries including Kenya, Tanzania, Uganda, Zambia, Benin and Rwanda, in either raising taxes on mobile transfers or internet access, ostensibly to fix perennial revenue shortfalls and runaway budget deficits.

Wave of Mobile Money Tax Hikes Squeeze Africa’s Poor to Spoil Governments
M-Pesamill in Kenya

Kenya recently increased electronic transfer excise duties by cellular phone providers, banks and money transfer agencies from 12% to 20% per transaction, meaning it will now cost Kenyans more to send money across platforms like mobile money service provider Mpesa or to request bank statements. The government of President Uhuru Kenyatta, which is facing a budget deficit of $ 5.62 billion, also announced that “telephone and internet data services shall be charged excise duty at a rate of 15% of their excisable value,” from 10% previously.

With about $ 448 million budget deficit, Rwanda has lined up a new bill that is expected to effect a significant increase in cashless tax. In Uganda, citizens have been slapped with tax increases of between 1% and 5% on items like mobile money transfers, and even social interactions on platforms like Facebook and Whatsapp. The Ugandan authorities hope to collect up to $ 4.4 billion each year from these sort of taxes and others. Social media and internet taxes have also been introduced in Zambia and Benin.

Tax Increases Line Pockets of Corrupt Leaders, Never Social Services

Beyond the jargon of monetary policies, it must be clear to African citizens how this sizeable tax was arrived upon and who it is going to benefit. In many African countries, including Mobutu Sese Seko’s Zaire, Sani Abacha’s Nigeria and Eduardo Dos Santos’s Angola, such unabashed tax assaults have not improved social services but ended up in pockets of state actors and in the service of misanthropic government activities.

In Angola, the son of former president Dos Santos has been arrested for allegedly stealing $ 500 million from state coffers. Abacha is thought to have laundered over $ 4.3 billion, while Sese Seko is a close competitor. The Zimbabwe government boasts the serial feat of robbing citizens’ life savings, first by taking the Zimbabwean dollar out of circulation in 2009, and now, by redenominating money deposited in US dollars to a nameless, unstable local currency that keeps falling.

Wave of Mobile Money Tax Hikes Squeeze Africa’s Poor to Spoil Governments

In spite of the country’s domestic debt incredulously increasing to $ 9.5 billion from $ 259 million in 2012, there is no indication that runaway government expenditure is going where it is needed most: the improvement of social services.

More than 40 citizens recently died of cholera, and thousands are living without access to safe drinking water. Government officials in the new administration of President Emmerson Mnangagwa still feel safer in foreign hospitals while the bulk of citizens have to make do with poorly resourced hospitals.

Cryptocurrency to Neutralize Tax Hikes and Curb Illicit Flows

Cyptocurrencies like bitcoin cash (BCH) are seen as key to helping African countries fight corruption, illicit transfer smuggling and high transfer or remittance costs.

A report by Enrique and Eduardo Aldaz Carrol published on the Brookings Institution website revealed that: “Cryptocurrency and blockchain could help prevent fraud and corruption, reduce the costs of enforcement thanks to easily accessible information and faster crosschecks, and help supervise implementation and monitor efficiency and effectiveness of spending, increasing development impact”.

Do you think governments in Africa are stifling development by raising taxes on mobile money? Let us know in the comments section below.


Images courtesy of Shutterstock and Mpesa


Need to calculate your bitcoin holdings? Check our tools section.

The post Wave of Mobile Tax Hikes Squeeze Africa’s Poor to Indulge Governments appeared first on Bitcoin News.

Bitcoin News

Fed hikes its key interest rate again and signals more increases coming despite Trump’s criticism

September 27, 2018 |

Despite President Trump’s unusual public criticism of their monetary policy, Federal Reserve officials inched up their key interest rate again on Wednesday — and indicated they would do so again in the face of strong economic growth.

The latest 0.25-percentage-point increase, approved by a unanimous…


L.A. Times – Business

Faster wage growth in strong jobs report is likely to mean more Fed interest rate hikes

September 9, 2018 |

Wage growth accelerated last month to its best year-over-year rate since 2009 in a strong jobs report released Friday, increasing the likelihood that Federal Reserve officials will keep hiking a key interest rate to head off higher inflation.

The Labor Department reported that the U.S. added 201,000…


L.A. Times – Business

Venezuela Devalues Currency and Hikes Wages, Stoking Fears About Instability

August 19, 2018 |

Businesses closed, banks struggled with transactions and people scrambled to find fuel Saturday, signs of panicked and skeptical reactions to Venezuela’s measures aimed at stabilizing a faltering economy.
WSJ.com: What’s News Asia

Trump escalates his criticism of Federal Reserve interest rate hikes

July 21, 2018 |

Before this week, it had been more than a quarter-century since a sitting U.S. president publicly pressured the independent Federal Reserve on interest rates.

On Friday, President Trump did it for the second day in a row.

In unprecedented back-to-back statements, Trump escalated his criticism of…


L.A. Times – Business

Quebec Hikes Electricity Price: Crypto Miners to Pay up to 3 Times Current Rate

June 23, 2018 |

Quebec Hikes Electricity Price: Crypto Miners to Pay up to 3 Times Current Rate

The Canadian province of Quebec has reportedly decided to charge cryptocurrency miners up to roughly three times the current price after they flooded utility Hydro-Quebec with requests for mining operations. In addition, several crypto-related proposals have been submitted including one that requires crypto firms to bid for power.

Also read: Yahoo! Japan Confirms Entrance Into the Crypto Space

Price Hike for Crypto Miners

Quebec Hikes Electricity Price: Crypto Miners to Pay up to 3 Times Current RateQuebec, a province in eastern Canada, offers one of the lowest power rates in North America. Its electricity is generated, transmitted, and distributed by the country’s largest electric utility, Hydro-Quebec, which was formed by the government in 1944, and currently has over 4 million customers.

The utility has been courting cryptocurrency miners for months to use its surplus electricity. However, due to an overwhelming number of requests for crypto mining operations, the province has decided that it “will make electricity prohibitively expensive for cryptocurrency miners until it figures out how to deal with a surge in demand from the energy-hungry industry,” Bloomberg reported this week, adding:

Provincial regulator Regie de l’energie authorized utility Hydro-Quebec to charge 15 cents per kilowatt hour to blockchain companies, about three times the price they have enjoyed up to now. The temporary pricing doesn’t apply to existing clients and their operations, which total about 120 megawatts.

Quebec Hikes Electricity Price: Crypto Miners to Pay up to 3 Times Current Rate“Blockchain companies will be required to bid for power and spell out the jobs and investment per megawatt that they will generate,” the utility further proposed. “The starting bid is 1 Canadian cent ($ 0.0075) per kilowatt hour above the rate the industry had previously enjoyed — roughly a 20 percent increase.”

Furthermore, Hydro-Quebec unveiled a plan Thursday, which requires approval from the regulator, “to allocate as much as 550 megawatts” for crypto mining on top of the 120 megawatts that are already in operation or approved, the publication detailed. A selection process will also be proposed which “will enable Hydro-Quebec to survey the industry on what it considers a fair price and to gauge what investment and jobs the applicants will generate,” a spokesman for the utility, Jonathan Cote, explained.

Overwhelming Demand from Crypto Miners

According to the publication, crypto miners flooded Hydro-Quebec with “requests that it says exceed its short- and medium-term capacity.” Cote told the news outlet on Thursday:

We don’t want to send a message to the market that this is the price for cryptocurrencies in Quebec…It’s more that requests are suspended until we have the proper framework determining conditions for that market.

“The temporary price is expected to be in place for several weeks until the regulator sets a tariff that will then be applicable to all,” the news outlet explained.

Quebec has been trying to attract crypto miners with its inexpensive electricity and cold winters, as news.Bitcoin.com previously reported. However, Hydro-Quebec indicated in January that it will not be able to meet the scale of power demanded by crypto miners. Prior to the rate hike decision, it started turning down new applications for crypto mining operations and considered halting mining operations during winter.

What do you think of Quebec hiking the electricity price for crypto miners? Let us know in the comments section below.


Images courtesy of Shutterstock and Hydro-Quebec.


Need to calculate your bitcoin holdings? Check our tools section.

The post Quebec Hikes Electricity Price: Crypto Miners to Pay up to 3 Times Current Rate appeared first on Bitcoin News.

Bitcoin News

Shale country is out of workers. That means $140,000 for a truck driver and 100% pay hikes

June 10, 2018 |

Jerry Morales, the mayor of Midland, Texas, and a local restaurateur, is being whipsawed by the latest Permian Basin shale-oil boom.

It’s fueling the region and starving it at the same time. Sales-tax revenue is hitting a record high, allowing the city to get around to fixing busted roads. But…


L.A. Times – Business

These Jobs Are Seeing Biggest Pay Hikes

May 23, 2018 |

Lawyers have enjoyed one of the largest pay increases over the past year. A 4.7% increase as of April brings the median base pay for an attorney to $ 101,817, according to Glassdoor. But lower-skill positions in high demand are making strides, too, including truck and delivery drivers. The…
Newser