MTN has found itself in yet another tax dispute in Nigeria, with the group saying it is reviewing a new decision by tax authorities in that country.
On Wednesday, Bloomberg reported that the Lagos-based Tax Appeal Tribunal ordered MTN to pay $72.6m (about R1.4bn), according to documents verified by two government officials. Calls to the tribunal for comment are said to have gone unanswered.
“We are reviewing the decision of the tribunal and will comment on this when we release our Q3 23 trading statement on October 27”, MTN said in a statement.
This issue is likely to remind investors of MTN’s run-ins with authorities in Nigeria in recent years. Those did not bode well for its investment case, but they were eventually resolved.
In 2015, MTN was infamously slapped with a $1bn fine by Nigeria’s government for not “deregistering SIM cards” — an administrative bungle that cost then-CEO Sifiso Dabengwa his job. MTN managed to negotiate on the original fine of $5.2bn.
In December 2018, the mobile operator was able to resolve an $8bn fine related to repatriated dividends. A $2bn tax bill was revoked in 2020 after MTN contested it.
The group has also had run-ins with Ghanaian authorities where MTN had a R13bn tax dispute at the start of 2023.
The latest news comes a week after MTN boss Ralph Mupita and five other heads of Africa’s largest mobile operators, including Vodacom’s Shameel Joosub, met with officials on the sidelines of the just-ended Mobile World Congress Africa annual telecom conference.
Among a host of items discussed with Rwanda’s head of state Paul Kagame and telecom industry body, the GSMA, was the issue of tax.
The CEOs called for tax rationalisation for the mobile industry through the development of targeted fiscal policy reforms that “support economic growth and digital development, deepening digital and financial inclusion and aligned with national targets”, such as the removal of tax on low-cost smartphones and sector-specific tax.
Earlier in 2023, Vodacom was involved in a case in the Democratic Republic of Congo, where the government says it is owed $243m in taxes.
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