The Ghana Revenue Authority has imposed a charge of approximately $773 million on MTN Ghana, a subsidiary of MTN Group, on the grounds that it allegedly underreported its revenue. The whole amount, which includes penalties and interest, is the fine.
The Ghana Revenue Authority (GRA) claims that between 2014 and 2018, MTN underreported its revenue in Ghana by around 30 percent.
After conducting audits on the company for the years 2014 through 2018, it was revealed that the issue was uncovered.
MTN Ghana issued the following statement on January 13, 2023, which was titled “Notice of Tax Assessment” and contained the following information: “Scancom PLC (MTN Ghana) stakeholders are advised that the Ghana Revenue Authority (GRA) issued the company with a notice of assessment of tax liability (the Assessment).
“The notice was dated on 10 January 2023 and received by MTN Ghana on 11 January 2023. On 13 January 2023, GRA issued a temporary withdrawal of the Notice of Assessment for 21 days to allow for further engagements.
“The Assessment was for an amount of GHS8,209,603,842.14 (including penalties and interest charges). In this regard, from the base component of the Assessment (that is, excluding penalties and interest), on MTN Ghana’s analysis, the GRA infers that MTN Ghana under-declared its revenue by more than approximately 30 per cent over the 5-year period 2014 to 2018.”
The company has stated that it will have a dialogue going with the appropriate authorities regarding the issue.
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MTN Ghana’s Stance on the Charge
The largest cellular network in Africa has stated that it intends to appeal the penalty since it feels the taxes have been paid.
“MTN Ghana believes that the taxes due have been paid during the period under assessment and has resolved to defend MTN Ghana’s position on the assessment vigorously,” the company stated.
“MTN Ghana strongly disputes the accuracy and basis of the assessment, including the methodology used in conducting the audit.”
It alleged, “MTN Ghana, one of the largest private sector taxpayers in Ghana, has been recognised on numerous occasions for its support of the GRA’s revenue mobilisation efforts.”
In addition, the GRA has successfully completed several tax assessments on MTN Ghana over a period of many years and has awarded MTN Ghana with a variety of taxpayer awards in appreciation of the company’s commitment to the fiscal development of the nation.
“We would like to thank the GRA for their support throughout the process, especially for allowing us a temporary withdrawal of the Notice of Assessment in a bid to resolve this matter in an amicable manner.”
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Hopes for MTN Ghana to overcome this
This isn’t the first time the MTN group would be experiencing such. Abubakar Malami, the Attorney General of Nigeria, filed an accusation against MTN Nigeria in 2018, alleging that the company had failed to pay over $2 billion in taxes and penalties.
After the case was withdrawn in 2020, MTN pursued a legal challenge and ultimately prevailed. With such experience, they could be able to handle this plight of MTN Ghana.
On the other hand, it is believed that the Ghanaian tax authority came up with the tax bill on MTN Ghana out of a pressing desire to replenish the country’s empty coffers.
In 2022, the Ghanaian cedi had the poorest performance of any currency in the world, contributing significantly to the country’s deteriorating economic situation. The inflation rate in the West African nation has increased by 54.1%, making it impossible to afford the basic necessities of life.
In December, Ghana said that it was going to stop making payments on most of its foreign debt. The country’s Eurobonds, commercial loans, and most of its bilateral loans were all affected by this decision.
Ghana defined this decision as an “interim emergency action.” This is in spite of the fact that an agreement to finance the amount of $3 billion was reached with the International Monetary Fund.
With the situation of Ghana’s economy and the devaluation of the cedi, it is no surprise that MTN Ghana is facing this challenge. They only need to overcome it as a group that experienced a similar event in Nigeria.