Nigeria’s Attorney General Drops $2B Tax Dispute Against MTN
South African telecoms firm MTN has endured a tough couple of years operating in Nigeria, one of its biggest markets, but things may finally be turning around for Africa’s largest mobile operator.
MTN Group received some good news on Jan. 10. Nigeria’s attorney general withdrew a $2 billion tax dispute against the company, according to Fin24.
In response to the news, MTN’s shares rose 10 percent on Jan. 13 on the Johannesburg Stock Exchange.
In September 2018, Nigeria’s attorney general accused the South African mobile service provider of not paying all its duties and taxes between 2007 and 2017, demanding $2 billion in compensation, according to BankerAfrica.
MTN disputed the claim and began legal action in Nigeria against the attorney general.
The case was postponed on multiple occasions and was finally meant to be heard at the end of January, Reuters reported.
Now that the tax demand has been dropped, MTN will be dealing with Nigeria’s tax authorities directly in an effort to resolve the situation as opposed to in the courts.
Nigeria is one of MTN’s three biggest markets. Its total revenue was $8.8 billion in 2018.
The Nigerian market accounts for 29 percent of MTN Group’s service revenue, 34 percent of voice revenue and 30 percent of digital revenue, according to ITWebAfrica.
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In May 2019, MTN Nigeria listed on the Nigerian Stock Exchange, becoming the first mobile network operator to do so.
MTN’s $5 billion listing made its the second largest firm on the Nigerian stock exchange, with only Dangote Cement’s $8.3 billion market cap topping it, according to Bloomberg.
In December 2018, MTN agreed to pay a $52.6 million settlement to the Nigerian Central Bank rather than the initial demand of $8.1 billion that the bank claims MTN improperly repatriated to South Africa, Businesslive reported.