GRA withdraws $773 million back tax payment demand from MTN

The Ghana Revenue Authority has withdrawn the earlier request for back payment of taxes worth US$773 million from 2014 from MTN Ghana Ltd according to several reports.

According to Bright Simons, Vice President of IMANI Africa, who shared the news on Twitter, the new development came to light following an update on the Johannesburg Stock Exchange.

“An update to the Johannesburg Stock Exchange today says that the govt of Ghana (GRA) has withdrawn the demand for back taxes from telecom giant, MTN. The earlier decision was attacked & mocked because it was based on work by Safaritech, which some analysts describe as "shady",” he wrote on February 3, 2023.

In a corresponding Bloomberg report, the international website said, “Ghana’s decision came after “extensive and productive discussions” during a 21-day negotiation period between the West African nation’s authorities and the mobile-phone operator, MTN.”

Background

Earlier this year, the Ghana Revenue Authority (GRA) wrote to MTN Ghana demanding an amount of US$773 million from the telecom giant which is a local subsidiary of the MTN Group, the South African mobile telecom giant.

According to documents sighted by GhanaWeb, the amount is in lieu of back taxes over a five-year period spanning 2014 to 2018.

It includes the unpaid tax sum along with penalties and interest charges, the MTN Group said on Friday (January 13).

The Ghana Revenue Authority issued MTN Ghana with the bill after auditing it for the years 2014 to 2018 and inferring that the company under-declared its revenue by about 30% during the period.

MTN Ghana challenged the position of GRA and announced it was going to ‘fight it’.

The telco stressed that all previous taxes had been duly honoured and that it disputes the “accuracy and basis” of the assessment.

“MTN Ghana believes that the taxes due have been paid during the period under assessment and has resolved to defend MTN Ghana’s position on the Assessment,” the company said.

The MTN Group has a presence in 19 countries in Africa and the Middle East.

SSD/DO