The Federal Inland Revenue Service (FIRS) has slapped MTN Group with a $2 billion tax bill, compounding the woes of the leading wireless company.
The company made known the tax bill on Tuesday.
The announcement of the tax bill comes days after the Central Bank of Nigeria (CBN) ordered MTN Nigeria hand over $8.1 billion that it said was illegally sent abroad.
MTN, whose Nigerian business brings in a third of its annual core profit, or EBITDA, said its total payment of around $700 million over the 10-year period fully settled the amount owing under the taxes in question.
Shares in MTN fell 17 per cent to 72 rand at 1315 GMT, bringing losses since last Thursday, when the central bank issued its demand, to nearly a third.
“These are old issues that have been investigated and closed but now they are being reopened,” Byron Lotter, a portfolio manager at Vestact in Johannesburg, said, adding it was possible MTN would be reviewing its presence in Nigeria.
Vestact owns about 30 million rand worth of MTN stock.
MTN, which has expanded in more than 20 frontier markets including war-ravaged Syria and Afghanistan, called the latest demands by Nigerian authorities “regrettable and disconcerting”.
“We remain resolute that MTN Nigeria has not committed any offences and will vigorously defend its position,” it said.
Nigeria’s head of asset recovery in the attorney general’s (AG) office could not immediately comment on the tax claim but said the AG’s office, headed by Abubakar Malami, was also behind last week’s $8.1 billion demand.
Nigeria’s main allegation against MTN is that it used improperly issued certificates to convert shareholder loans in its Nigerian unit to preference shares in 2007. As a result, $8.1 billion in dividends paid by MTN Nigeria to its parent between 2007 and 2015 were illegal and should be returned.