By MTN Group, Africa’s largest telecoms company, plans to challenge the current tax discord in its largest market, Nigeria.
It is once again embroiled in a tax dispute in Nigeria, having been ordered to pay $72.6 million in overdue taxes.
The order was issued last week by Nigeria’s Tax Appeal Tribunal (TAT) in Lagos, and it claimed the amount is for unpaid taxes between 2007 and 2017.
A five-person tribunal rendered its decision in response to an appeal filed by MTN Nigeria against the Federal Inland Revenue Service’s request for payment of the unpaid tax.
MTN Group, located in South Africa, has had long-running battles with Nigeria’s tax authorities over the years.
Today, MTN said its Nigeria subsidiary released results for the quarter ended 30 September, updating the markets of the TAT’s decision to uphold a principal VAT liability of $47.8 million.
MTN said having reviewed this outcome and considering input from tax and legal consultants, MTN Nigeria has resolved to appeal the TAT’s decision.
Karl Toriola, MTN Nigeria CEO, commented: “We have received the judgement issued by the TAT sitting in Lagos. The judgement pertains to the VAT assessment for the periods covering 2007 and 2010 to 2017, as issued by the Federal Inland Revenue Service to the company.
“The company will issue a separate and comprehensive statement articulating its position on the matter.”
Nonetheless, Nigeria, the most profitable of MTN Group’s 19 markets, delivered strong commercial performance in the period under review, driving growth across all of its core revenue lines, supporting service revenue growth.
“We recorded double-digit growth of 10.6% on the increased usage of our voice propositions and a growing base. This was supported by our customer value management initiatives and revamp of voice propositions,” said Toriola.
MTN’s data revenue grew by 36.4% on increased usage and data conversion in the new and existing base.
Fintech revenue increased by 5.6%, while digital revenue grew 55.4%, with MTN saying this was led by increased adoption of its digital products. Mobile subscribers increased by 4.8% to 77.6 million.
In other key metrics, active data users increased by 13.3% to 43.1 million and active mobile money (MoMo PSB) wallets increased by 53.1% to 3.6 million.
Earnings before interest, tax, depreciation and amortisation (EBITDA) grew by 16.3% to N907.9 billion, while the EBITDA margin decreased by 2.4 percentage points to 51.2%.
Profit before tax decreased by 42% to N232.5 billion (up 8.6% to N465.3 billion, adjusted for the foreign exchange (forex) loss.
In the period, MTN said, earnings per share decreased by 45.2% to N7.06 kobo (up 5.2% to N14.50 kobo adjusted for the forex loss).
“Our balance sheet remains strong with sufficient headroom to withstand macro volatilities,” stated Toriola. “This is a result of our disciplined value-based capital allocation strategy.
“We are able to comfortably meet our operational, financial and capex investment obligations, while effecting dividend payouts to our shareholders in line with our policy.”
Lookidg ahead, he notes: “The operating environment remains challenging due to the removal of the fuel subsidy, the liberalisation of foreign exchange management, the impact of the 2023 Finance Act and the ongoing volatility in the global macro-economic and geopolitical environment.
“During Q4, we will build on the momentum from Q3 to deliver on our service revenue growth target. We remain focused on our priorities − our network, MoMo PSB acceleration and operational efficiency − to build the resilience and growth of our business.
“We plan to roll out capex during Q4 to reach 83% 4G and 10% 5G population coverage by year-end. We will leverage the additional 2.6GHz spectrum to enhance network capacity. This will help us sustain growth in data traffic and further drive our ‘Own the Home’ strategy by leveraging the 5G fixed wireless access devices, mobile broadband solutions and fibre-to-the-home connectivity.”
ITweb
