MTN Group Limited, Africa’s largest wireless carrier, has announced that a GH8.2 billion ($672 million) tax bill it received from the Ghana Revenue Authority (GRA) has been canceled.
MTN said in a filing on Friday that the decision came after “extensive and productive discussions” between the revenue authority and the mobile-phone operator over a 21-day period (February 3, 2023).
The decision to withdraw the tax bill came after the Ghana Revenue Authority sent a surprising claim to Ghana’s largest corporate taxpayer last month for the period between 2014 and 2018.
The potential fine was approximately 5% of MTN’s market capitalization, and the government’s decision “removes a threat to this year’s shareholder returns,” according to Bloomberg Intelligence analyst John Davies in a note.
The Authority has demanded that some of the country’s largest corporations pay millions of dollars in back taxes.
Similar bills have been issued to Gold Fields Ltd., Kosmos Energy Ltd., and Tullow Oil Plc. The companies all deny the government’s claims.
Ghana lost access to international capital markets as its debt and loan service costs ballooned. The government has been forced to divert the majority of its revenue toward servicing an estimated 576 billion cedis in public debt.
In the midst of a cedi slump, it is restructuring most of its obligations and seeking a $3 billion loan from the IMF.
