Telecommunications company MTN Group Ltd, Africa’s largest wireless carrier, plans to commence a dispute resolution method if talks with Ghanaian authorities over $773 million back-tax bill which include penalties and interest charges it received last week fail.
The bill covers the period between 2014 and 2018 and implies that MTN under-declared its revenue in the country by 30%, the Ghana Revenue Authority said in a statement.
MTN Ghana’s audit adhered to “the principles of fairness and transparency,” Ghana’s tax agency said in a statement Monday. While MTN has received numerous tax compliance awards in the past, “these do not in any way prejudice the conduct of audits as required by law,” according to the statement.
Before initiating that process, the company is engaging with authorities to resolve the unexpected bill that came after the Ghanaian tax agency switched to a new methodology to track call data records based on the advice of a third-party consultant.
This row in Ghana is the latest legal and regulatory challenge MTN is facing in markets around Africa. Nigeria fined MTN $5.2 billion in 2015 for failing to disconnect unregistered phone lines, although the parties later settled for less than the initial bill.
About three years ago, the operator successfully challenged a separate $2 billion claim for unpaid taxes by the Nigerian authorities. It’s also faced down authorities in Benin and Cameroon over the terms of its licenses.
MTN must pay 30% of the tax bill to trigger a conflict resolution process through Ghanaian courts, unless an appeal to lower the amount is approved, according to Group Chief Executive Officer, Ralph Mupita.
“The methodology was applied retroactively” and without prior notice, Mupita said. “We strongly dispute this and will defend our position.”
The West African country, which lost access to the international capital markets due to its inflating debt and loan service costs, suspended interest payments on its external debt last month.
The nation is trying to restructure its obligations to finalize a $3 billion bailout from the International Monetary Fund.
