MTN challenging R904-million back-tax bill

The Naira’s plunge weighed on the earnings of Nigeria’s biggest wireless carriers.

MTN Group Ltd. increased its estimate of unrealised foreign-exchange losses in Nigeria and restated its earnings per share for the six months through June by 13%, while Airtel Africa Plc said its loss of $13 million was “driven largely by foreign-exchange.”

The relentless fall of the naira has made it Africa’s worst performer among currencies tracked by Bloomberg.

Airtel reported a foreign exchange loss of $471 million. MTN’s shares dropped the most in almost three months.

Nigeria is MTN’s biggest market by subscribers and the Lagos-listed unit MTN Nigeria Communications Ltd. contributes more than a third of the group’s total revenue.

The unit recognised additional unrealised foreign-exchange losses on outstanding matured trade obligations and increased net finance costs for the six months through June, after incorrectly measuring them before, the company said in a statement on Monday.

MTN’s woes increased after tax authorities asked it to pay an additional amount following an assessment.

The company will challenge the order by the Nigerian Tax Tribunal to pay $47.8 million (R903.63 million) in taxes.

The evaluation pertains to a value-added tax assessment for the periods covering 2007 and 2010-17, it said.

African phone companies have been pushing back on sporadic tax demands from countries and regulators on the continent.

Last week, six telecommunications chief executives — including MTN’s Ralph Mupita and Vodacom Group Ltd.’s Shameel Joosub — urged African leaders and policymakers to “rationalise” taxation on the mobile industry through the development of targeted fiscal policy reforms, according to an agreement signed in Rwanda.

MTN has a history of impasses with Nigerian authorities and was victorious in a dispute in the West African nation in 2020, when the government dropped a $2 billion claim for back taxes.

More recently, Ghana had to abandon a $773 million back-tax bill against MTN that the company disputed.

MTN shares fell as much as 5.6%, the most since Aug. 2,  and were 5.1% lower by 4:13 p.m. in Johannesburg.

Now read: How much South African mobile operators invest in their networks

Latest news

Partner Content

Show comments


Share this article
MTN challenging R904-million back-tax bill