The South African government is calling for a middle-path solution to MTN’s tax fallout in Ghana.
International relations and cooperation minister Dr Naledi Pandor on Friday implored Africa’s largest mobile phone network operator “to work closely with the authorities in Ghana to devise a solution”.
This comes after MTN was hit with a R13 billion tax assessment by the Ghana Revenue Authority (GRA) on 11 January.
The revised tax assessment stems from an audit of MTN Ghana commenced by the GRA in 2019, which covered the period 2014 to 2018.
Ralph Mupita, MTN Group CEO, said the objective of the audit was “to give assurance on the reliability and completeness of revenues declared by MTN Ghana for the purposes of calculating taxes”.
The GRA then issued the assessment to MTN Ghana for an amount of approximately R13 billion ($773 million). This includes penalties and interest charges.
The telco notes with this assessment, the GRA infers MTN Ghana under-declared its revenue by approximately 30% over the five-year period in question.
The 30% is based on MTN calculations, and the company says it “strongly disputes this” and it will defend its position.
MTN is questioning the accuracy and basis of the GRA’s assessment, including the methodology used in conducting the audit.
“It is important to also emphasise that we believe MTN Ghana has paid its due taxes during this period under assessment,” Mupita told analysts on 16 January.
MTN is now in engagements with authorities in Ghana for the temporary withdrawal of the assessment.
On Friday, the South African government weighed, calling for fairness in dealing with the matter, adding it is committed to promoting increased South African investment in Ghana.
“South Africa is one of the largest foreign direct investors in Ghana, mainly in mining, communication, beverages, retail and franchising, etc,” said Pandor.
“These investments contribute to the Ghanaian gross domestic product (GDP) and job creation. According to the Ghana Investment Promotion Centre, there are over 100 South African companies registered and operating in Ghana, employing over 19 087 Ghanaians and 510 expatriates. Over the past 10 years, South African companies have undertaken over 170 projects in Ghana, valued in excess of $1 431 523 166 in capital investment.”
Win-win cooperation
The minister deplored the treatment of local businesses across Africa, saying she previously held meetings with CEOs of South African companies invested and operating on the continent.
“They [CEOs] have reported an increasing number of difficulties, ranging from unfavourable market conditions and inconsistent regulatory frameworks, inconsistent tax regimes, repatriation of funds and delays in loan repayments.
“Of major concern is that competitors of South African companies from other parts of the world do not appear to be subjected to the challenges South African companies are subjected to.”
These unfavourable conditions, Pandor said, have led to disinvestment in some African markets by major South African companies, such as Shoprite, Game, Mr Price, Foschini, Woolworths, Tiger Brands, Sasol-Chemicals, Sasol-Gas, Group Five, Murray and Roberts, Metrolife Group, Telkom, Southern Sun and Protea Group, to name a few.
“The disinvestment has had a devastating impact on employment opportunities, poverty and inequalities, in particular, and GDP growth, in general.”
Pandor went on urge MTN and Ghana authorities “to do everything possible to find an amicable solution to these reported challenges”.
“Our common destiny, as outlined in the Agenda 2063 aspirations, depend on win-win intra-African collaboration and cooperation.”
Ghana is one of the key markets for MTN, which has operations in 19 countries and 285 million subscribers.
MTN Ghana was the first telecoms provider in Ghana to list on the Ghana Stock Exchange (GSE) in 2018, and the amount raised in the initial public offering (IPO) was the highest to be raised in an IPO on the GSE.
In addition, the IPO was the first in the world to use mobile financial services – MTN Mobile Money – as a medium to subscribe to shares.
—itweb.co.za—
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