Sierra Leone’s tax authority has reached a settlement with one of the country’s biggest mobile phone companies in an alleged tax evasion row.
A source at the National Revenue Authority (NRA) says AFRICELL will pay in four tranches the Le 19 billion ($ 2.7million) it owes in corporate tax for 2015.
This follows the sealing-off last week of the telco’s offices in Freetown in execution of a forceful compliance of what was left of a total of Le 30 billion ($5 million) the company owed.
NRA says AFRICELL has paid Le11billion but that they had to force complete compliance which prompted the use of armed police.
The telecoms company is also accused of understating its tax returns, and faces further allegations of failing to submit a statement of its financial returns this year, which the tax authority says should confirm last year’s tax returns.
NRA says it is currently executing an operation targeting businesses which owe the state tax arrears running into hundreds of billions of leones. The operation is in line with stringent austerity measures imposed by the government at the beginning of this month as part of efforts to salvage the country’s struggling economy.
The country operates a self-assessment tax system, which means that companies and businesses assess themselves and determine the tax they pay to the revenue authority.
On assessing itself for 2015, Africel declared to the NRA that it was supposed to pay Le3.9 billion (US$500, 000), according to Mohamed Bangura, Corporate Affairs Manager at NRA. He said a review of the assessment by the Authority revealed that AFRICELL was in fact supposed to pay Le32.3 billion.
“They grossly understated their taxes….It is clear [tax] evasion,” Bangura told Politico in a telephone interview.
He said they were not only displeased with Africel’s “attempt to deprive” government of much-needed revenue, but also for their “unacceptable payment proposal” which prompted the unceremonious closure of its administrative building in Freetown.
Backed by armed police men from the Operations Support Division, NRA officials on Thursday sealed the doors of the company’s headquarters, leaving employees in utter confusion.
But that move, according to Bangura, paid some dividend because it prompted the company to reach a new payment arrangement, in addition to the immediate payment of Le 4 billion.
He said Africel’s management also agreed to pay a further Le 5 billion in early November.
AFRICELL would not comment on this or allegations that they attempted to cook the books.
Africel Sierra Leone, a subsidiary of the Lebanese-owned Lintel Group, is one of the leading operators in a market of three competitors in the country. The firm claims to control the largest share, 64 per cent, of the Sierra Leone market, in terms.
Culled Politicosl
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