Orascom to challenge new Algerian tax bill

Egypt's telecom giant insists it has already paid taxes for its Djezzy subsidiary.

 Egypt’s telecom giant Orascom said Thursday it had received a new tax bill from Algeria for its Djezzy subsidiary for dues already paid, adding that it will challenge the reassessment.

Orascom Telecom Holding(OTH) made the announcement a day after it said that the head of Djeezy had been summoned by Algerian police for alleged violations of foreign exchange laws.

A statement that Orascom Telecom Algeria (OTA), which operates under the brand Djezzy, received a preliminary tax notification for 2008 and 2009 “to the amount of approximately 230 million dollars.”

“OTA had already paid the taxes for the same period,” the group said.

The company will “take all necessary legal steps to challenge the reassessment,” the statement added.

Orascom Telecom has been locked in a lengthy dispute with Algeria — where Djezzy is the largest mobile operator with over 14 million subscribers.

The telecom giant said in April that OTA had paid authorities in Algeria some 600 million dollars in tax arrears for the years 2005 to 2007.

On Wednesday, Orascom said that the head of OTA was summoned by Algerian police for alleged violations of Algeria’s foreign exchange laws.

“The CEO of OTA was called in by police for investigation over allegations that technical assistance fees paid to OTH against certain support services provided by OTH to OTA during 2007, 2008 and 2009 were not made in accordance with the relevant exchange rules,” it said.

Orascom has denied any misconduct and said it has submitted documentation to support its claim.

In June, Orascom announced it had halted talks on selling some of its operations to MTN South Africa, with whom it had discussed the sale of Djezzy, because of opposition from the Algerian state.

Under a law ratified by Algeria’s parliament last year, the state has the right to pre-empt the sale of shares in any foreign company operating in Algeria.