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Orascom's Algerian tax appeal rejected

Orascom Telecom subsidiary Djezzy is alleged to owe tax and penalties from 2004 to 2007 totalling over US$600

Orascom's Naguib Sawiris said his comments were misconstrued by Algerian authorities.
Orascom's Naguib Sawiris said his comments were misconstrued by Algerian authorities.

Egyptian telecom firm  Orascom Telecom's appeal to have a tax bill levied against its Algerian subsidiary Djezzy has been rejected by Algerian authorities.

It is claimed that Djezzy owes tax and penalties from a period that stretches from 2004 to 2007.

Orascom said it "intends to appeal the rejection according to the Algerian rules and regulations which dictates a three tiered appeal process," according to a Reuters report.

With just under 15 million of the group's 89 million subscribers Djezzy is one of Orascom's key operations and is responsible for some 50% of Orascom's cashflow, but conditions in Algeria are making it increasingly difficult for the operator to do business there, according to Orascom's management team.

At Mobile World Congress last month, a frustrated Naguib Sawiris, Orascom chairman, declined to comment on the dispute. He told those gathered at the industry conference in Barcelona that his comments were always misconstrued by Algerian authorities.

In order to appeal, it will have to pay 20% of the remaining balance of the taxes and penalties the Algerian government claims, or around $110 million, which it said it will do soon.

Orascom paid US$120 million in December in order to file an appeal against a $597 million tax bill which Algeria says Djezzy owes for 2005-2007. Algeria also claims a $50 million bill from 2004. The appeal rejection covered both claims, according to Reuters.