Ghanian Authorities Fine MTN Ghana $773 Million

Seven years after MTN Nigeria was fined $5.2 billion for regulatory non-compliance, MTN Ghana has received a bill of $773 million (including penalties and interest charges) from the Ghanaian Revenue Authority for back taxes. According to the statement released by MTN Ghana, the revenue authority inferred that MTN Ghana underdeclared its revenue by more than 30% between 2014 and 2018.   

MTN, however, is strongly disputing the position of the GRA. Their press release stated: “MTN Ghana believes that taxes due have been paid during the period under assessment.” 

According to the MTN subsidiary, it is strongly disputing the accuracy and basis of the assessment and the method used in conducting the audit. According to MTN Ghana, a third-party consultant and a new methodology that considered call records, recharges, and other information was used. 

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The press release stated that the audit began in 2019 to assure MTN Ghana’s accuracy and completeness of revenue declarations for the period 2014-2018 in tax computations. According to the release, “The GRA had not issued MTN Ghana with any prior guidelines and standards relating to the new CDR sequence-based methodology used for the audit.”

The explanation provided by MTN Ghana also includes that in May 2021, both parties (GRA and MTN Ghana) had agreed to an independent review by an unnamed global professional services firm. As a result, the independent review could not support the conclusions reached by the third-party consultant as a basis for its assessment. 

MTN Ghana had claimed they would engage with the extant authorities in the case. MTN Group together with MTN Ghana also fixed an investor conference call for Monday, 16th January 2023. 

About MTN Ghana

MTN Ghana came into existence in 1994 through Scancom Ltd (now Scancom Plc.). MTN Ghana presently is the largest market shareholder in the Ghanaian telecoms industry with more than 18 million subscribers or 55% of the entire market share. MTN, the most valuable company in the Ghanaian Stock Exchange (GSE), has previously brushed in with the Ghanaian authorities, most notably in 2020. 

In 2020, the Ghanaian National Communications Authority (NCA) made a move to designate MTN Ghana as a significant market power. The action would have given the regulator legal backing to reduce MTN’s market share in the voice, SMS, data, and mobile money market. MTN responded by taking the regulator to the Supreme Court in a case that MTN later withdrew after the regulators had backed down from their proposed action. 

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MTN’s Controversial Run-Ins

Ghana is not the only country where the South-African based company had faced legal problems. The company also faced legal hurdles in Nigeria when the Nigerian subsidiary MTN Nigeria was on the receiving end of the largest ever fine slammed by the Nigerian government on a private corporation, N780 billion or $5.2 billion at the time (2016). However, the company ended up paying about $3.2 billion after a diplomatic meeting between President Buhari and the South African President, Jacob Zuma. 

Also in 2018, MTN Nigeria had to reach an out-of-court settlement worth $53 million with the Nigerian government after the Central Bank of Nigeria accused the company of illegal repatriations of funds.  

In 2017, MTN Rwanda was fined by the Rwandan authorities for breaching its license by running its IT services in Uganda. Even in the U.S., the South African giant faced questions about paying off the Taliban and al-Qaeda to ensure that its towers would not be destroyed. The lawsuit filed before the US District Court of DC alleges that their action violated the US Anti-Terrorism Act. 

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