Embattled telecoms giant, MTN Group Limited, is deeper in
troubled waters as the Federal Government of Nigeria moves to recover back taxes
to the tune of $2 billion.
Information about this latest development is contained in a
press release which was issued today by the telecom group
According to the statement, Nigeria’s Attorney General (Mr
Abubakar Malami), while conducting an investigation into corporates’ tax
compliance in Nigeria, calculated that MTN owes the Nigerian Government the sum
of $2 billion in back taxes. The taxes span over a ten-year period and are
related to the importation of foreign equipment into the country as well as
payments to the suppliers of the said equipment.
Some parts of MTN’s statement read thus:
“In this process, his office made a high-level calculation
that MTN Nigeria should have paid approximately $2.0 billion in taxes relating
to the importation of foreign equipment and payments to foreign suppliers over
the last 10 years and he requested MTN Nigeria to do a self-assessment of the
taxes in this regard that has actually been paid.” -MTN
Consequently, MTN said it carried out the internal
assessment as directed by the Attorney General, and in August 2018 submitted a
report showing that the “total payments made to the tax authorities in regard
to these foreign imports and payments in aggregate are $700 million.”
But the Attorney General rejected the report and last week
notified MTN Nigeria that it owes $2 billion in back taxes.
Now, MTN believes this latest controversy is uncalled for,
as it has supposedly settled all of its tax obligations. The company also
believes that “it is both regrettable and disconcerting” that it is facing
these issues despite previous efforts made in the past to resolve them.
Recall that MTN has been embroiled in many controversies
recently. Barely one week ago, the Central Bank of Nigeria (CBN) ordered it to
refund the sum of $8.1 billion; being funds that were illegally remitting to
South Africa over time.
In line with the development, Nigeria’s apex bank also
imposed a fine of ₦5.86 billion on the four banks which were
accused of facilitating the illegality; including Standard Chartered Bank,
Stanbic IBTC, Diamond Bank Plc and Citibank.
The controversy caused MTN Group’s shares to plunge to
all-time lows in over five years. It also cast doubt over the likelihood of
MTN’s planned Nigerian IPO ever taking place.
At the moment, MTN Group is worried as uncertainty hangs
over its operation in Nigeria. Asides the doubt that has been cast over MTN
Nigeria’s IPO, the telco is also reportedly worried the Nigerian Communications
Commission (NCC) may reimpose the initial fine of $5 billion should the company
fail to abide by its listing ultimatum of May 2019.
More so, Africa’s leading telco will struggle to refund
the $8.1 billion which is about half of
its market capitalisation.
