LAGOS — Nigeria’s attorney general has withdrawn a $2 billion tax demand against South African telecoms giant MTN Group, the company said on Friday, in a closely watched case that investors say has damaged Nigeria’s appeal.
In a letter filed with the Nigerian Stock Exchange, MTN said the government had decided to drop its case and refer the issue to tax and customs authorities “with a view to resolving contentious issues.”
“We are very pleased with the decision of the (attorney general) and we commend him for his wisdom,” MTN Nigeria’s Chief Executive Ferdi Moolman said in a statement.
Attorney General Abubakar Malami did not immediately respond to a request for comment.
Malami had ruled that the firm owed taxes relating to the import of equipment and payments to foreign suppliers from 2007 to 2017.
The Johannesburg-listed shares of MTN Group rose more than 5% higher after the announcement. Nigeria is its biggest market, with roughly 60 million users.
The company, whose local unit listed on the Nigerian Stock Exchange last year, said at the time that it would sell more shares to the public and increase local ownership once the tax row was resolved.
MTN has a contentious history with Nigerian authorities.
In 2015, the communications regulator handed MTN a $5.2 billion fine https://reut.rs/36IFw61 for failing to disconnect unregistered SIM cards. MTN eventually reached a deal in which the fine was cut to $1 billion.
In August 2018, MTN’s shares fell by more than 20% after the central bank demanded the company repatriate $8.1 billion https://reut.rs/2FCANHd that it said the company had illegally sent abroad. MTN agreed to pay $53 million https://bit.ly/30an584 to settle the case.
Investment funds, banks and analysts have said the latest tax case, as well as the previous disputes, have made foreign investors reluctant to commit to long-term investments in the country.
($1 = 305.9500 naira) (additional reporting by Yadarisa Shabong in Bengaluru, Camillus Eboh in Abuja and Emma Rumney in Johannesburg; Editing by Alex Richardson, Susan Fenton and Pravin Char)
Share this post if you enjoyed! 🙂