MTN share price soared in South Africa following the withdrawal of a $2 billion tax demand by the Attorney General of Nigeria, Abubakar Malami.
The withdrawal of the tax claim which ended a 16-month long battle with the AGF caused the shares of the company to close 5.3% higher in Johannesburg on Friday. MTN share price is currently 82 Rands (N2,050) per share.
In August 2018, the Attorney General of the Federation demanded approximately $2 billion in back taxes from MTN. The telcom company disputed the claim and consequently took the AGF to court.
After more than a year of court battles, the AGF has finally decided to withdraw the demand and refer the matter to the Federal Inland Revenue Service (FIRS) and Nigeria Customs (NC) for resolution.
Following the withdrawal, MTN Nigeria has also withdrawn its legal action against the AGF and have decided to engage the FIRS and NC on this matter.
Speaking on the withdrawal of the demand, MTN Group CEO, Rob Shuter expressed appreciation to the AGF for paving way for an amicable resolution to the matter.
We appreciate this decision of the Attorney General which paves the way to an orderly and amicable resolution of this matter. MTN remains fully committed to meeting our fiscal responsibilities and contributing to the social and economic development of Nigeria and all regions where we operate.
Nigeria is one of MTN’s most profitable markets and the AGF’s tax demand was just one of its many clashes with the country’s regulatory bodies. While MTN disputed the demand from the onset, it however struggled to convince investors it could get the tax demand cancelled.
In August 2018, MTN share prices plunged more than a whopping 23% after a massive $8 billion fine by the CBN for illegally repatriating over $8 billion to South Africa. The company’s stock never completely recovered.
Withdrawal of the AGF’s demand has had a positive effect as MTN share price has surged. The development also pushed the company’s market valuations to $11.1bn, according to Bloomberg.
With the recent development, MTN can start to recover from their many regulatory troubles in the country as well as also boost investor confidence.
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