Egyptian mobile firm Orascom Telecom (OT) said on Thursday its Algerian unit had received a new tax request amounting to about $230 million, a move that escalates the firm’s row with Algiers.
The unit, known as Djezzy, is Orascom’s single biggest source of revenue. It has been at the center of a long dispute with Algerian authorities since it was hit with previous back-tax claims amounting to over $600 million.
"OTA (Orascom Telecom Algeria) fully objects to the reconstitution of its audited accounts," the firm said in a statement about the new tax request from Algiers.
The firm said the tax reassessment applied to the years 2008 and 2009, years when it said it had already paid its dues. Orascom said the allegations were "based primarily on the unfounded allegation that OTA did not keep proper accounts."
It said the reassessment was considered an initial notification and the firm had 40 days to respond before receiving the final reassessment.
Orascom agreed to talks to sell the unit to the Algerian government after authorities blocked a plan to sell it to South Africa’s MTN. Algiers says it has the right to buy the unit before any foreign suitor.
Orascom Chairman Naguib Sawiris is in talks to merge his holding company Weather Investments, which owns over half of Orascom, with telecoms group Vimpelcom.
But analysts see uncertainty around Djezzy’s fate as a major hurdle to any merger prospects for its Cairo-based parent firm.
