MTN Nigeria faces more woes as government seeks to recover $2 bln outstanding tax debt

MTN Nigeria, the local unit of South Africa's telecommunication giants said on Tuesday it has been slammed with a $2 billion tax by the government of Africa's top economy.
The announcement of the tax bill comes few days after the telecoms firm was directed to return $8.1 billion illegally transferred out of the country to its home country.
Nigeria is the company's most lucrative in term of returns on investment but has increasingly become problematic market since it was first slapped with a fine of $1.7 billion for violating directive to disconnect pre-registered sim.
In a statement, MTN disclosed it had been in talks with Nigeria’s Attorney General about an investigation into tax compliance by the mobile operator.
“We remain resolute that MTN Nigeria has not committed any offences and will vigorously defend its position,” the company said in the statement.
The office of Nigeria’s attorney general calculated that MTN owes $2 billion related to the import of foreign equipment and payments to suppliers over the past decade.
It asked the South African company to carry out a self-assessment in response, but rejected the company’s findings, which concluded that it had owed -- and paid -- $700 million.
MTN said its total payment of around $700 million fully settled the amount owing under the taxes in question.
“This could be an economic and political play by Nigeria,” Ron Klipin, an analyst at Cratos Wealth in Johannesburg, said.
“The Nigerian economy is looking for additional sources of revenue and at the same time the government wants to be seen as tightening up the regulatory framework in the country.”

However, some analysts claimed that the most South African firms operating in the country without regards to local regulations, causing friction between the government and their officials.


Shares in MTN dropped 5.5 percent to 82 rand as of 1131 GMT.