Egyptian Telecom company Orascom has filed an appeal against Algerian tax authorities for allegedly overcharging it. The company says it has paid about $120 million (against back taxes that Algeria says it owes), in order for the appeal to go through.
The Algerian tax authority alleged, in November 2009, that the mobile telephone operator owed $596.6Million in back taxes and penalties for 2005-2007. “In order to file its appeal… Algerian law requires OTA (Orascom Telecom Algerie) to pay 20% of the taxes and penalties alleged to be owing,”, Orascom said in a statement. It said it had made the payment.
Orascom shareholders agreed to an $800Million rights issue to make up for lost dividends from its Algeria unit, which operates under the brand name Djezzy, until the tax issue is resolved.
Djezzy, which had revenue of $1.8 billion in 2007, provides Orascom with more than 50 percent of its cash flow.
Orascom runs mobile phone operations from North Africa to North Korea, and earlier this month won approval in Canada to go ahead with a start-up wireless operation called Glob alive, in which it owns an indirect stake.