The largest wireless carrier in Africa, MTN Group Limited, has declared that a tax bill for GH¢8.2 billion ($672 million) it received from the Ghana Revenue Authority (GRA) has been rescinded.
According to a filing by MTN on Friday, the decision was reached following “extensive and fruitful discussions” over the course of a 21-day negotiation period between the revenue authority and the mobile phone service provider (February 3, 2023).
Bloomberg Intelligence analyst John Davies noted that the potential fine represented about 5% of MTN’s market capitalisation and the government’s decision “removes a threat to this year’s shareholder returns.”
Some of the biggest companies in the country have been under pressure from the Authority to pay millions in back taxes.
Gold Fields Limited, Kosmos Energy Limited and Tullow Oil Plc have received similar bills.
All of the companies dispute the government’s claims.
Ghana’s ballooning debt and high loan servicing costs prevented it from accessing international capital markets.
The majority of the government’s revenue must now go toward paying off an estimated GH576 billion in public debt.
It is restructuring most of its obligations amid a slump in the cedi and is seeking a $3 billion loan from the IMF.