Algeria: Egypt`s telecom giant in tax row

  1. Posted on Friday 1 October 2010 - 18:15
    KingsleyKobo
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    Kingsley Kobo, AfricaNews reporter in Abidjan, Ivory Coast
    Orascom Telecom - Egyptian Multinational Corporation and Arab world's biggest mobile phone operator by subscribers - continues to face hard times in Algeria, which came to existence after the 2010 World Cup qualifier match between Egypt and Algeria turned violent last year.
    Egypt’s Orascom Telecom locks horns with Algeria
    After being hit last November by back-tax bill of US$600 million for 2004-2007, which is yet unresolved, Orascom Telecom Algerian unit, Djezzy, has received a new tax bill from the Algerian government totaling US$230 million for 2008-2009, the Wall Street Journal said on Friday.

    The Algerian authorities stipulate that the reassessment is an initial notification, that Orascom Telecom Algeria (OTA) has 40 days to respond to the preliminary notification before receiving a final reassessment.

    Orascom Telecom says it will take all necessary legal steps to challenge the new assessment, although the previous $600 million tax bill was ineffectively confronted by the Egyptian telecommunications giants.

    The Algerian officials maintain that the reassessment was based primarily on the allegation that Djezzy did not keep proper accounts for the two years in question.

    But Orascom Telecom countered that its accounts were fully audited and approved by both Djezzy’s international auditors, KPMG, as well as its local statutory auditors.

    The unfavourable business climate Orascom Telecom faces in Algeria has prompted the Egyptian corporation to ponder a sale of Djezzy, but a deal worth US$7.8 billion from Africa’s largest mobile operator, MTN Group Ltd. was blocked by the Algerian government, which is also interested in purchasing Djezzy, but at a lower tag.

    Djezzy mobile phone services in Algeria raked in some US$849 million in the first semester of 2010.

    Djezzy has the biggest slice of the Algerian mobile market at 59.1%, according to Orascom Telecom.

    Orascom Telecom is owned by 54-year-old Egyptian-born Naguib Sawiris, who was listed this year in Forbes magazine as the 37th richest person in the world with a wealth of US$2.5 billion.

    Social relations between Algeria and Egypt have deteriorated since last year, but there are signs of improvement especially after Algerian club JS Kabylie and Egypt’s Al Ahly played peaceful home and away matches in the ongoing Orange CAF Champions League.

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