The Mail & Guardian has reported that MTN moved billions of rands which were earned in Africa to offshore tax havens while Cyril Ramaphosa was chairman of the company.
An investigation by the Mail & Guardian’s amaBhungane investigative unit found that most of the money landed in Mauritius.
The money was badged as “management fees”, but according to the report MTN employs no people in Mauritius, and essentially only owns a postbox in the country.
MTN was quoted as saying its actions did not amount to tax avoidance, and that it “has not actively engaged in any unlawful activities”.
MTN responds to tax avoidance claims
MTN said in a statement to MyBroadband that it takes serious exception to any suggestion that it is involved in a tax avoidance scheme.
“Such suggestions lack facts or merit, and could be very damaging to our brand,” the company said.
MTN said it complies with all regulations in the countries where its operates, including South Africa, Nigeria, Uganda, and Ghana.
“All regulatory matters in our markets are always addressed directly with local authorities, and where applicable, duly reported in our Annual Financial Statements as per our JSE listing requirements.”
“Owing to the evolving nature of our business operations and compliance frameworks in our markets, MTN continually engages authorities to find mutually-agreeable ways to meet our obligations.”
It added that wherein the relevant authorities have queried its practices or structures, MTN has always been accessible to engage on such matters.
“At no point has MTN ever been found to be involved in any scheme that seeks to help the company avoid its tax or legal responsibilities in any jurisdiction where we operate, including South Africa.”
The full expose is available in the Mail & Guardian newspaper of 9 October 2015. MTN’s response to the investigation can be found here: MTN responses to MG investigation.