Karim Djoudi: “Algeria's multi-million back-tax claim on Orascom Telecom is not yet wrapped up”
A 230- million dollar back-tax claim which Algeria levied on Orascom Telecom's Djezzy unit is not final, Algerian finance minister Karim Djoudi said on Thursday.
- Djezzy has been notified of the first amount but it is not a final amount. We still need thorough verification of the documents put forth by the tax administration,’ Djoudi told reporters outside a session of the lower house of parliament in Algiers.
- The Algerian government’s $230 million back-tax claim against Egypt’s Orascom Telecom) is not final until the company is given a chance to challenge it, the firm earlier confirmed in a statement issued on Wednesday.
- Asked by reporters about the Vimpelcom-Orascom Telecom deal, Karim Djoudi said: “Orascom Telecom Holding (OTH) launched an operation with the Russian partner. Regarding Algeria, we have a business relationship with Orascom Telecom Holding.”
- “We have started an acquisition operation with OTH. OTH has expressed its willingness to sell us Djezzy … We now have to assess the value of the transaction. We have launched a tender to select an investment bank to advise on the nationalization process,” he added.
- Karim Djoudi also said that a recent $230 million back-tax claim against Djezzy would not necessarily be the firm’s total liability. He did not say though if he expected the final amount would be higher or lower.
- Orascom’s CEO Naguib Sawiris has agreed to sell most of his telecom interests, including control of Orascom Telecom, to Russian mobile operator Vimpelcom but the sale of OT’s Algerian subsidiary Djezzy has been rightly opposed by the Algerian government.
- Last month Orascom said Djezzy, its most lucrative asset, had received a new back-tax request from the Algerian government. The firm had already been served over $600 million worth of separate claims.
- Orascom said it had 40 days to challenge the new claim after receiving notice of the tax reassessment. Algeria’s Management body of big Enterprises would then study any arguments made by the firm against the claim and issue a final reassessment shortly.
- “We would like to stress the preliminary nature of the government’s notification,” Orascom said.
- The firm would then have 30 days to either pay the full claim or pay one-fifth in order to appeal. The company could recover this amount if the appeal was successful, it added.