New revelations weaken the Conac report incriminating MTN and Orange

Out of the FCfa 170 billion in unpaid taxes and other licence fees ascribed to Orange, Camtel, and MTN Cameroon in a report of the National Anti-Corruption Commission (Conac in French) published on 19 January 2016, there is what Conac led by Rev.

Dieudonné Massi Gams (photo) calls an “illegal tax gift” of FCfa 52.5 billion awarded to MTN and Orange, “two perfectly solvent taxpayers among the most solvent of taxpayers in Cameroon”.

According to the revelations made these past days in the wake of the publication of this report disputed by all the above-mentioned telecom operators, it appears that “this illegal tax gift” is based on two agreements signed on 13 March and 11 May 2015 between the Cameroonian government and the two mobile telephone operators.

These agreements, we learn, are devoted to a rebate of 60% on the licence fees owed by the two operators to the telecom regulatory authority in taxes on transmission frequencies, for the period covering 2002 to 2014. This in total is equivalent to a tax rebate of FCfa 52.5 billion, being FCfa 28.3 billion for Orange and FCfa 24.2 billion for MTN.

Moreover, the negotiations which led to these tax rebates were approved by the Office of the President, as evidenced by correspondence from the General Secretary of the said office, Ferdinand Ngoh Ngoh, dated January 23, 2015.

“The related proposals for action will be submitted to the esteemed attention of the Head of State”, one can read at the end of this letter, which leads to the assumption that the agreements signed in March and May 2015 between the government and two mobile operators MTN and Orange, were in principle approved by the Cameroonian Head of State.

At the heart of the matter

Incidentally, to better understand the origins of these rebates, it is necessary to go back to 2002, year during which the Ministry of Posts and Telecoms established a tax on transmission frequencies to which Orange and MTN are subjected, as they were then the only mobile operators in the Cameroonian market.

This tax brought disagreement between the operators, the regulatory authority and the government, who did not agree on the formula to calculate the fees.

After several work sessions, we learn, a workgroup is finally set up to deliberate and find the best formula. But, in the meantime, the parties agreed to a flat rate of FCfa 200 million per year to be paid by each mobile operator for the transmission frequencies tax.

In 2015, before starting negotiations for their licence renewal, Orange and MTN informed the government of their desire to settle the matter of the transmission frequencies tax. This request led to negotiations, authorised by the Office of the President, then the tax rebates under investigation by the National Anti-Corruption Commission.