Nigeria hits MTN with R30bn tax bill
The MTN Group faces a $2bn (R30bn) demand for taxes in Nigeria, the latest in a series of skirmishes with authorities in the SA mobile phone company’s most lucrative, but increasingly problematic, market.
The announcement of the tax bill incurred over the last decade comes days after the West African country’s central bank ordered MTN’s Lagosbased unit to hand over $8.1bn (R122bn) that it said was illegally sent abroad.
MTN disclosed it had been in talks with Nigeria’s attorneygeneral about an investigation into tax compliance in a statement outlining the background to the case of the money sent out of the country.
“In this process, the attorney-general’s office made a high-level calculation that MTN Nigeria should have paid approximately $2bn in taxes relating to the importation of foreign equipment and payments to foreign suppliers over the last 10 years,” MTN said.
MTN, whose Nigerian business brings in a third of its annual core profit, or Ebitda, said its total payment of around $700m over the 10-year period fully settled the amount owing under the taxes in question.
The latest demands come two years after MTN agreed to pay more than $1bn to end a dispute with Nigeria over unregistered SIM cards.
Shares in MTN dropped 5.6% to R81.95 by 3pm on Tuesday, bringing losses since last Thursday to nearly 25%.
“These are old issues that have been investigated and closed but now they are being reopened,” Byron Lotter, a portfolio manager at Vestact in Johannesburg, said.
“I’m not surprised a lot of people are selling and saying ‘these guys are just too volatile, I’m out’.”
SA hotels and casino group Sun International said it was in the final stages of exiting Nigeria following clashes with regulators and shareholders.
Retailer Woolworths and foodmaker Tiger Brands both quit Nigeria in recent years.
MTN called the latest demands by Nigerian authorities “regrettable and disconcerting”.
“MTN Nigeria will continue to engage with the authorities. We remain resolute that MTN Nigeria has not committed any offences,” it said. –