The Lagos State Tax Appeals Tribunal has ordered MTN Nigeria to pay $72.5 million in tax arrears to the Federal Inland Revenue Service (FIRS). This amount covers the period from 2007 to 2017. The verdict was pronounced following an appeal by the local subsidiary of the South African telecoms group.
The dispute began in May 2018, when the Federal Attorney General's Office published a report on certain tax returns made by MTN Nigeria for the financial years 2007 to 2017, particularly concerning VAT and certain withholding taxes. In July 2021, FIRS issued an initial VAT assessment of $93.6 million against MTN, including $72.55 million as principal and $21.04 million for penalties and interest.
MTN contested this assessment and a revised one was issued on April 14, 2022, bringing the amount to $135.7 million. Although the principal amount of tax due was reduced to $48 million, interest and penalties increased to $87.9 million. Subsequently, the company appealed to the Tax Appeal Tribunal. After review, the tribunal ruled in favor of the Lagos tax authorities in collecting the principal amount of $72.5 million and canceled the penalties in MTN's favor.
This amount is not unbearable for MTN Nigeria, which ended the first half of 2023 with a free cash flow of almost 500 billion naira ($632 million). However, it should be noted that this sum is far greater than the overall provisions made by the company for possible unfavorable court rulings, which at the start of the year stood at just 22 billion naira.
This is not, however, likely to pose a risk to the company's performance on the Lagos Stock Exchange, where it is listed. Its share price has gained 26.9% since the beginning of the year, according to data consulted by Ecofin Agency. Net income per share halved in the second quarter, but MTN Nigeria's growth prospects continue to attract investors.
Although the MTN Group is the dominant shareholder in its Nigerian subsidiary, with a 70.7% stake, big names like BlackRock are also shareholders. Mazzi Asset Management, an all-black South African investment firm, has increased its stake to become the second largest institutional shareholder with 16.5 million shares.
• Investors seem to keep focusing on yields, which are high for the moment• New Leadership might see...
• Inflation within the West African Economic and Monetary Union (UEMOA) fell to a two-year low of 0....
• Qatar Airways and Kenya Airways establish strategic agreement, introducing a third daily flight be...
• EY is preparing to leave Francophone Sub-Saharan Africa by 2026• The exit could unlock $500 m...
• Interbank volumes rose 18.7% in May, while rates declined across the market• The BCEAO cut its mai...
• Ghana signs a deal with eLearning Africa to expand digital learning access across the country.• The partnership focuses on deploying modern digital...
Ghana launches the Oncology Nurse Leadership Program (ONLEP) to train specialized oncology nurses from seven African countries. The five-year...
Ivanhoe Mines signs deal covering 100% of Kamoa-Kakula smelter’s copper output. The smelter will process up to 500,000 tonnes annually, starting at...
African gas projects drive significant contracts for Asian shipbuilders, especially for Floating Liquefied Natural Gas (FLNG) units. South Korean...
Kolmanskop offers a haunting blend of lost wealth, colonial history, and the unstoppable force of nature. Located just a few kilometers inland from...
Located about 40 kilometers from Cape Town’s city center, Boulders Beach in Simon’s Town is one of the Cape Peninsula’s most iconic destinations. This...