Nigeria’s AGF drops tax case against MTN and boosts stock profitability

The new year is turning out great for African Telecommunications giant, MTN as tax arrears claims worth $2 billion has been dropped against the company. The claims arose last year from the office of Nigeria’s Attorney General, Abubakar Malami, who demanded the tax payment on arrears for the importation of foreign equipment and payments to foreign suppliers dating as far as 2008. Although the Attorney General has withdrawn the demands from the court, the matter has been escalated to the Federal Inland Revenue Service and the Nigeria Customs Service for proper resolution.

In 2018, after the Attorney General released a letter demanding full payments on the arrears, the telco company vehemently denied the tax debt and sued the Nigerian government. Hence, this development comes as a relief to the firm as expressed by CEO, Ferdi Moolman who also lauded the Attorney General for his wisdom and reassured the company’s commitment to meeting its fiscal responsibilities whilst playing its part in the social and economic development of Nigeria. As well as co-operation with the tax and customs agency, the company promises to withdraw legal action against the Attorney General of the Federation and the Nigerian Government concerning the matter.

The 16-month long legal contest undoubtedly took its toll on MTN’s stock performance as it has been a major source of concern for its investors. As a result, the waiver and amicable settlements in view have seen the company’s share price rise by 5.3 per cent to 83.67 Rands in Johannesburg. The All Shares Index (NSEASI) also appreciated by 0.07% rising to 29,415.39 points. Market year-to-date (YTD) returns currently stands at 9.59% as shares closed flat at N116 on Friday with MTN Nigeria topping market value list.

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