MTN Group Ltd, Africa’s largest wireless carrier, said a GH¢8.2 billion ($672 million) tax bill it received from the Ghana government has been scrapped.Ghana’s decision came after “extensive and productive discussions” during a 21-day negotiation period between the West African nation’s authorities and the mobile-phone operator, MTN said in a filing on Friday.The decision to withdraw the tax bill came after the Ghana Revenue Authority last month sent the country’s biggest corporate taxpayer a surprise claim for the period between 2014 and 2018.
The potential fine was approximately 5% of MTN's market capitalization, and the government's decision "removes a threat to this year's shareholder returns," according to Bloomberg Intelligence analyst John Davies in a note. Ghana's cash-strapped government has demanded that some of the country's largest corporations pay millions of dollars in back taxes. Similar bills have been issued to Gold Fields Ltd., Kosmos Energy Ltd., and Tullow Oil Plc. The companies all deny the government's claims. Ghana lost access to international capital markets as its debt and loan service costs ballooned. The government has been forced to divert the majority of its revenue toward servicing an estimated 576 billion cedis in public debt. As the cedi falls, it is restructuring the majority of its obligations.
