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World Bank endorses Somalia’s steady economic recovery

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The World Bank has backed Somalia’s economy to grow above expectations for the next three-to-five years, if the country can sustain its current economic reform momentum.

The Horn of Africa country has been in turmoil since 1991, when clan warlords overthrew President Siad Barre and then turned on each other. Over the past decade it has been hit by famine and sporadic terror attacks by al Qaeda-linked militant group al Shabaab.

Several indicators over the last 12 months have demonstrated that Somalia is well on its way to recovery from the years of turmoil and economic distress.

Somalia on the rise
Tax collection by the government increased by 29% last year, as the economy recovered from a drought the previous year and the government changes its tax policies, the World Bank said.

The Washington based lender, in September last year, approved the first loanto Somalia in 30 years, $80 million to fund public finance reforms.

In May this year, the International Monetary Fund said Somalia’s economy was on the right track but warned that it was still vulnerable to fragile security, climate change and poverty.

In November last year, continent aviation powerhouse, Ethiopian Airlines made its first landing in the Somali capital Mogadishu after 40 years absence.

“Our flights will quickly grow to multiple daily flights given the huge volume of traffic between the two sisterly countries and the significant traffic between Somalia and the rest of the world,” Tewolde GebreMariam, Ethiopian Airlines’ chief executive, said in a statement.

Source: Africanews

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Kenyans to start paying more for Zoom calls starting next month

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Starting from next month, paid users of Zoom in Kenya will have to fork out an additional fee for their subscription, as the government is set to impose value-added tax (VAT) on several online services to operate in the country.

In an email sent to paid subscribers yesterday, Zoom announced that starting Aug. 1, the Kenyan government will levy a 16 per cent VAT to be borne by the customer.

“Like many companies with a growing international presence, Zoom is routinely evaluating its indirect tax collection and remittance obligations,” the company said.

“The application of these taxes to business with online activities is a complex and evolving area. Zoom continues to review such developments, as well as the nature and extent of its activities in different jurisdictions, and, based on such regular review, will start charging indirect taxes where applicable,” the message read in part.”

Zoom currently prices its lowest subscription package, which offers unlimited group meetings among other perks at Ksh15,000 (about $150), while the highest-paid package costs Ksh25,000 ($250) per year. With the VAT implementation, Kenyan individuals and companies will now pay at least Ksh2,500 ($25) more for the cheapest package and at least Ksh4,100 ($41) more for the highest-priced package.

Zoom is not the only digital service to recently fall under the microscope of the Kenyan taxman. Last year, Kenya Revenue Authority (KRA) introduced the Finance Act 2020 Digital Service Taxes (DST) on income from services provided through the digital marketplace in Kenya, which is charged at 1.5 per cent of the gross value of a transaction (exclusive of VAT). The regulation requires individuals and firms that supply or expects to supply taxable goods and services worth at least Ksh5 million ($50,000) in a year to register for VAT. However, Kenyans registered for VAT will be exempted from paying the tax.

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Court orders Safaricom to pay 600,000 shillings to a blind man for refusing to hire him

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A blind man has won Ksh6million ($6,000) in compensation after a Kenyan High Court agreed with his claim that Safaricom violated his rights for failing to hire him despite interviewing and inviting him to sign an employment contract.

Mr Macharia accused Safaricom of denying him employment as a customer care executive based on his disability and sued for compensation for discrimination and violation of his rights.

He told Justice James Makau that he responded to an advert by Safaricom in August 2016 for a customer experience executive position, which invited qualified Kenyans irrespective of “race, colour, religion, gender, tribal origin, disability or age”.

Along with other persons living with disabilities (PWDs), Macharia explained that he was shortlisted for the role and went through the oral interview and medical test, except for the SHL computerised aptitude test, which was removed for the PWDs so that they were not unduly disadvantaged by the interview process. He was later invited to sign the contract of employment in July 2017. However, the network operator said the invite was erroneous.

Safaricom, in its defence, denied discrimination claims, as well as the plaintiff’s assertion that his rights were violated. The network operator argued that it allowed Macharia to be interviewed for the role of a customer care executive but lacked the specialised software that would enable visually impaired persons to work. The company also noted that it employed 11 other persons living with disabilities for the same role as their disability did not affect their ability to work.

The judge ruled in the plaintiff’s favour that Safaricom violated Mr Macharia’s rights and failed to treat him with dignity. In his speech, the Judge explained that Safaricom should have informed Mr Macharia earlier that the software was unavailable instead of subjecting him to the interview process and inviting him to sign a contract, only to claim later that letter of invitation was sent to him erroneously.

“I find that the Respondent’s excuse to be an afterthought that was introduced late to the detriment of the Petitioner. The Respondent knew right from the beginning that the Petitioner’s work called for software, yet they took him through all recruitment steps,” Justice Makau ruled.”

He added that Mr Macharia must have suffered great humiliation from fellow candidates, family members and friends.

The court, however, absolved Safaricom of any claim of discrimination, noting that Mr Macharia had not shown that he was mistreated during the interviews.

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Kenyan’s Diaspora sent home 33b shillings in June

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According to new data from the Central Bank of Kenya (CBK), diaspora remittances remittance inflows remained strong in June 2021, amounting to USD 305.9 million compared to USD 288.5 million in June 2020 and USD 315.8 million in May 2021. The report also showed that the cumulative inflows in the 12 months to June 2021 totalled USD 3,383 million compared to USD 2,809 million in the same period in 2020, a 20.4 per cent increase.

The United States continues to be the largest source of remittances in Kenya, accounting for 58.8 per cent of remittances in June 2021.

Meanwhile, in May, remittance inflows increased to USD 315.8 million, compared to USD 258.2 million in May 2020, representing a 22.3 per cent increase. The cumulative inflows in the 12 months to May 2021 totaled USD 3,365 million compared to USD 2,816 million in the same period in 2020, a 19.5 per cent increase.

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