MTN Group has updated its assessment of unrealized foreign exchange losses in Nigeria and announced its intention to challenge a recent tax demand from the Nigerian authorities.
In a statement on Monday, the company’s Nigerian division acknowledged additional unrealized foreign exchange losses on matured trade obligations and higher net finance costs for the first half of the year due to previous measurement errors. As a result, MTN Group’s earnings per share for the first half of the year have been restated and are now 13% lower than previously reported.
MTN, the largest wireless carrier in Africa, saw its shares drop by as much as 3% and trade 2.7% lower in Johannesburg by 11.39 am. MTN Nigeria Communications, the unit listed in Lagos, is the company’s largest market in terms of subscribers and contributes over a third of the group’s total revenue.
Additionally, MTN plans to challenge a Nigerian Tax Tribunal order to pay $47.8 million in taxes, which relates to a VAT assessment for the periods between 2007 and 2010-2017. The company stated that it would appeal the decision after reviewing it and consulting with tax and legal experts.
Phone companies in Africa are resisting sporadic tax demands from countries and regulators on the continent.
Last week, six telecommunications CEOs, including Ralph Mupita from MTN Group and Shameel Joosub from Vodacom Group, signed an agreement in Rwanda, urging African leaders and policymakers to streamline taxation on the mobile industry through targeted fiscal policy reforms. MTN has a history of disputes with Nigerian authorities and achieved success in 2020 when the government dropped a $2-billion claim for back taxes.
More recently, Ghana had to abandon a $773-million back-tax bill against MTN, which the company contested.