The company’s share price jumped by 8.2 per cent upon news of the resolution
MTN Group has reached an agreement with the Nigerian government over a high-profile taxation dispute that has weighed heavy on the pan-African telcos’ share price for months.
The Nigerian government originally accused MTN Group of improperly repatriating $8.1 billion of revenues and of intentionally avoiding Nigerian taxes on that amount. However, the government has now reduced the amount to just $52.6 million.
"MTN Nigeria and the Central Bank of Nigeria have agreed that they will resolve the matter on the basis that MTN Nigeria will pay the notional reversal amount without admission of liability," MTN Group said in a statement to the press.
MTN Group’s share price jumped by around 8 per cent on news of the agreement, to stand at 89.00 rand as of the 31st December 2018. Just 12 months earlier, MTN Group’s share price was 133.73 rand but the high-profile tax scandal in Nigeria has seen the company’s stock crash by around 33 per cent.
The fall in the company’s share price attracted interest from Africa’s biggest investment fund, Public Investment Corporation (PIC), which upped its stake in MTN Group from 24 to 26 per cent last month.
After reaching the agreement with the Nigerian government, MTN Group believes that the matter is now fully resolved.
“MTN Nigeria continues to maintain that its tax matters are up to date and no additional payment, as claimed by the attorney-general, is due, and consequently no provisions or contingent liabilities are being raised in the accounts of MTN Nigeria for the attorney-general back taxes claim,” the company said in a statement to the press.