Orascom appeals Algerian tax
By Tarek El-Tablawy |
December 29, 2009, Tuesday
|
Print Edition
Print Edition
EGYPTIAN company Orascom Telecom said yesterday it had appealed against a US$596.6 million tax bill levied against its Algerian subsidiary, a dispute that surfaced amid tension between the two countries over a World Cup qualifier match.
Orascom, which operates Mobinil, Egypt's largest mobile phone service provider by subscribers, said it would pay 20 percent of the taxes and penalties assessed against it by Algerian tax authorities as a prerequisite to filing the appeal.
The company said it paid roughly US$120 million to Algerian authorities last Thursday "under protest and in reservation of all rights."
The dispute surfaced last month amid tension between Egypt and Algeria over a World Cup qualifier match. Egyptian businesses in the country - including those belonging to Orascom subsidiary Orascom Telecom Algerie - were damaged by Algerian football fans, straining relations between the two nations.
Mobile networks
In the Orascom case, Algerian authorities argued the company did not maintain proper accounts between 2005 and 2007.
Orascom, which operates mobile phone networks in several African nations as well as North Korea and Pakistan, has argued the claims are "unfounded and unacceptable," and that it was exempt from taxes during that period.
The dispute cast a pall over the telecom giant. Its Algeria operations account for roughly 40 percent of its revenues and authorities in the North African country had said that, given the outstanding bill, Orascom would not be able to transfer dividends out of the country.
To allay concern about cash flow, Orascom shareholders have approved a rights offering of US$800 million.
The Algeria tax issue is the latest hurdle for Orascom.
The company is locked in a dispute with France Telecom for months over an arbitration court's ruling requiring it to sell its stake in Mobinil Telecom, a holding company that owns a 51 percent stake in the Egyptian Company for Mobile Services - Mobinil's operator.
Orascom said the partial tax bill it paid to file the appeal is recoverable if it prevails in the dispute.
Orascom, which operates Mobinil, Egypt's largest mobile phone service provider by subscribers, said it would pay 20 percent of the taxes and penalties assessed against it by Algerian tax authorities as a prerequisite to filing the appeal.
The company said it paid roughly US$120 million to Algerian authorities last Thursday "under protest and in reservation of all rights."
The dispute surfaced last month amid tension between Egypt and Algeria over a World Cup qualifier match. Egyptian businesses in the country - including those belonging to Orascom subsidiary Orascom Telecom Algerie - were damaged by Algerian football fans, straining relations between the two nations.
Mobile networks
In the Orascom case, Algerian authorities argued the company did not maintain proper accounts between 2005 and 2007.
Orascom, which operates mobile phone networks in several African nations as well as North Korea and Pakistan, has argued the claims are "unfounded and unacceptable," and that it was exempt from taxes during that period.
The dispute cast a pall over the telecom giant. Its Algeria operations account for roughly 40 percent of its revenues and authorities in the North African country had said that, given the outstanding bill, Orascom would not be able to transfer dividends out of the country.
To allay concern about cash flow, Orascom shareholders have approved a rights offering of US$800 million.
The Algeria tax issue is the latest hurdle for Orascom.
The company is locked in a dispute with France Telecom for months over an arbitration court's ruling requiring it to sell its stake in Mobinil Telecom, a holding company that owns a 51 percent stake in the Egyptian Company for Mobile Services - Mobinil's operator.
Orascom said the partial tax bill it paid to file the appeal is recoverable if it prevails in the dispute.
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