Nigeria hands MTN US$2 billion tax bill

Giant mobile service provider MTN faces a US$2 billion demand for taxes in Nigeria, the latest in a series of skirmishes with authorities in the company’s most lucrative market.

The announcement of the tax bill incurred over the last decade comes days after the West African country’s central bank ordered MTN’s Lagos-based unit to hand over US$8.1 billion that it said was illegally sent abroad.

MTN disclosed it had been in talks with Nigeria’s Attorney General about an investigation into tax compliance in a statement outlining the background to the case of the money sent out of the country.

“In this process, his (the Attorney General’s) office made a high-level calculation that MTN Nigeria should have paid approximately $2.0 billion in taxes relating to the importation of foreign equipment and payments to foreign suppliers over the last 10 years,” MTN said.

MTN, whose Nigerian business brings in a third of its annual core profit, or EBITDA, said its total payment of around $700 million over the 10-year period fully settled the amount owing under the taxes in question.

The latest demands come two years after MTN, Africa’s biggest telecoms company, agreed to pay more than $1 billion to end a dispute with Nigeria over unregistered SIM cards.