In Africa, Every Valley

Together, we go from isolated to celebrated. Any dream can become a reality, with over 560 million Africans covered by a high-speed digital highway.

When you can reach out to the most isolated people amongst you, and connect them from village to village, from nation to nation andMTN from there to the world, Group you go. When you can use technology Limited to teach, where books can’t reach, we all go. When 30 million people who could never bank before, now have a bank in their pocket, they go.

Every day, MTN is inspired by the unstoppable spirit of the people we serve.

That’s why, We’re goodTax together. report for the year ended 31 December 2019 everywhere you go In Africa, every valley

TBWA\HUNT\LASCARIS 921574 TBWA\HUNT\LASCARIS can be Silicon Valley. Any dream can become a reality, with over 560 million Africans covered by a high-speed digital highway.

When you can reach out to the most isolated people amongst you, and connect them from village to village, from nation to nation and from there to the world, you go. When you can use technology to teach, where books can’t reach, we all go. When 30 million people who could never bank before, now have a bank in their pocket, they go.

Every day, MTN is inspired by the unstoppable spirit of the people we serve.

That’s why, We’re good together.

everywhere you go MTN Group Limited Tax report for the year ended 31 December 2019 01

TBWA\HUNT\LASCARIS 921574 TBWA\HUNT\LASCARIS In Africa, every valley can be Silicon Valley. Any dream can become a reality, with over 560 million Africans covered by a high-speed digital highway.

Every day, MTN is inspired by the unstoppable spirit of the people we serve.

That’s why, We’re good together.

everywhere you go TBWA\HUNT\LASCARIS 921574 TBWA\HUNT\LASCARIS Contents

01 Tax report 01 Salient features 02 Foreword 03 Economic contribution 04 Current tax environment 05 MTN’s approach to tax 07 Continuous improved tax governance and transparency 08 Total tax contribution and effective tax rates

MTN is an emerging market mobile operator with a clear vision to lead the delivery of a bold, new digital world to our 251m customers. We are inspired by our belief that everyone deserves the benefits of a modern connected life. Ours is one of the most admired brands in Africa and is also among the most valuable African brands. MTN is one of the Top 40 companies listed on the JSE in Johannesburg, with a market capitalisation of R155bn at the end of 2019 – the year in which we celebrated our 25th anniversary. We were established in South Africa at the dawn of democracy in 1994 as a leader in transformation. Since then, we have grown by investing in sophisticated communication infrastructure and by harnessing the talent of our diverse team of more than 19 000 people across 21 operations in Africa and the Middle East.

MTN Group Limited Tax report for the year ended 31 December 2019 Salient features

Group total tax contributionLA Group revenue R30,5bn R151,5bn 2018: R24,1bn 2018: R134,6bn

Adjusted group profit Group profit before tax before tax R17,6bn R16,8bn1 2018: R15,0bn 2018: R14,2bn

Reported group effective Adjusted group effective tax rate tax rate 39,25% 41,23%2 2018: 36,18% 2018: 38,12%2

Taxes on production3 Taxes on profit4 R15,9bn R8,3bn 2018: R12,0bn 2018: R5,4bn

1 Adjusted group profit before tax represents group profit before tax as reported excluding: Non-taxable gain from the MTN Cyprus sale (2019: Rnil and 2018: -R2,11bn); non-taxable gain from Jumia dilution and sale of Amadeus and Travelstart (2019: -R1,04bn and 2018: Rnil); Nigeria regulatory fine and related expenses (line item includes unwinding interest on the Nigeria fine liability and the amortisation of fees related to the listing of MTN Nigeria) (2019: R0,2bn and 2018: R1,16bn); and hyperinflation and the goodwill impairment adjustment (2019: R0,01bn and 2018: -R0,55bn). 2 The adjusted group effective tax rate is calculated by dividing the group reported tax number (after adjusting for the tax impacts of the numbers included in footnote 1 above, as applicable) by the adjusted group profit before tax. 3 Taxes on production is made up of all indirect taxes and withholding taxes collected and borne by MTN. 4 Taxes on profit is made up of corporate taxes borne by MTN, education tax borne by MTN and dividend taxes borne and collected by MTN. LA Limited assurance. Assurance report and definition available at www.mtn.com

MTN Group Limited Tax report for the year ended 31 December 2019 01 Foreword

In many of the countries within which we operate, MTN is one of the biggest taxpayers. With this comes a responsibility to report thoroughly and transparently on our tax affairs. At MTN, this reporting is subject to our system controls and internal financial controls. We maintain this in line with our standard processes and procedures on enterprise risk management and governance. Group CFO Ralph Mupita In 2019, we prepared and submitted our country-by- country report to the South African Revenue Service for the 2018 year. We also published our 2018 annual tax report and PricewaterhouseCoopers’ (PwC) independent judging panel awarded MTN first place in the PwC Building Public Trust Through Tax Transparency Awards. This award was made for excellence in tax reporting among the top 100 listed companies on the Johannesburg Stock Exchange, in the multinational companies’ category.

Tax transparency requires that companies move beyond merely providing their tax numbers and performance. In the ‘MTN’s approach to tax’ section we have endeavoured to Bolder provide readers of this report with an understanding of the A rallying call to make the most of the company’s approach to tax, risk management, tax planning opportunities, with a great company, great as well as our views on specific tax risks. We also give our people and a leading brand. approach to dealing with uncertain tax positions, such as the MTN Nigeria matter related to the Attorney General of the Federal Republic of Nigeria (AGF). In January 2020, the AGF withdrew a demand – made in the third quarter of 2018 – for US$2bn as a claim for back taxes from MTN Nigeria and referred the matter to the tax and customs authorities. MTN Nigeria remains of the view that against Faster the AGF claim, no provisions or contingent liabilities are It is all about agility. We have work to do and we required. As MTN, we remain committed to building and need to find further ways to get through it faster maintaining cordial relationships with all regulatory and with less effort. authorities, and indeed with all stakeholders.

Businesses contribute to enhancing sustainable societies in many ways, with the taxes they pay being just one of these ways. In 2019, the group continued to contribute significantly to the communities in which we operate Together through, for example, greater digital and financial inclusion; employment; skills development; investment in Teamwork, collaboration and partnership. infrastructure; the development of businesses in our supply It is about strengthening relationships and chain; and of course through our contribution to tax harnessing that spirit of togetherness in how revenues. The latter goes significantly beyond the corporate we work internally and with our partners and income taxes paid on our profits. In this report, in the ‘Total societies across our footprint. tax contribution’ section we endeavour to quantify this contribution, which includes (but is not limited to) corporate taxes, indirect taxes, withholding taxes, payroll taxes, operating licence fees and other payments to government authorities. In the year our total tax contribution amounted to R30,5bn

Integrity is one of MTN’s core values: we are committed to transparency, and complete candour is one of our vital behaviours. This voluntary report is testament to our values. It is an effort to explain our tax affairs clearly, demonstrate our business’s value creation, and in so doing improve our business reputation and build and maintain trust with our many stakeholders. We appreciate your interest.

Ralph Mupita Group chief financial officer Fairland

March 2020

02 MTN Group Limited Tax report for the year ended 31 December 2019 Economic contribution

As one of the largest mobile operators in our markets, we the communities within which we operate. Youth accounts acknowledge that our activities have significant implications for over 60% of the population across our markets, it is for for the communities in the regions in which we operate. It is this reason that we have shifted our key strategic focus vital that we understand exactly who is affected by our of our corporate social investment towards youth activities so that we can ensure their interests are promoted empowerment. Our approach to CSI is to systematically when strategic business decisions are made. MTN has address job creation, enhance competitiveness and drive identified the following among our key stakeholders: inclusive growth, while ensuring that we maintain our focus governments; regulators and policy makers; subscribers/ on addressing national priority areas aligned to the National customers; civil society; trade partners; the mobile industry; Development Plan of each of our markets. the media; suppliers/vendors; organised business; equity partners; the investment community and MTN people. In 2019, MTN’s CSI totalled R189,5m (2018: R185m) across 150 projects. Our projects have reached 2 million people, VALUE DISTRIBUTION which include over 345 000 youth, 459 000 women, as well Our activities drive economic value within each of the as over 11 000 differently abled people. An additional 36 jurisdictions in which we operate. This value is distributed to computer laboratories or digital classrooms were opened our stakeholders in a multitude of ways only some of which on top of the 925 since inception, and 2 600 scholarships are measurable. This includes: were granted to students in need to help further their education. 1. Business During 2019, MTN spent R119,6bn (2018: R106,6bn) with 4. Governments suppliers and contractors. In 2019 we made a significant contribution to government revenues in the regions where we operate. This information We committed capital expenditure of R26,3bn (R26,0bn in is detailed in the ‘Total tax contribution’ section of this 2018). MTN South Africa’s share of capex amounted to report. We are often the largest taxpayer in the markets R7,6bn (R9,5bn in 2018); MTN Nigeria’s capex amounted to within which we operate. R8,0bn (R6,9bn in 2018). 5. Digital inclusion In 2020 we will continue to invest in our networks to ensure We advanced our work to build a digital operator, adding we are ready for the digital revolution and plan to increase 18,2 million subscribers to reach a total base of 251 million, our capex spend to R28,5bn. and recording 95 million active data users and 35 million active MoMo users. This growth is central to our belief that 2. Employees everyone deserves the benefits of a modern connected life. In 2019, MTN had 19 288 employees representing In support of this, we launched a US$20 smartphone during 58 different nationalities. We spent R10,6bn in staff costs the year, following on from our US$20 smart feature phone (R9,5bn in 2018). developed in 2018. To ensure Africa does not miss out on the instant messaging revolution, we launched our own In the year, we invested R271m in employee learning and instant messaging platform, Ayoba, in March 2019. Ayoba is development (R270m in 2018). Employees are actively now live in 12 markets and has registered 2 million monthly encouraged to look for opportunities to continuously active users. Broadening our fintech offering remains a improve their capabilities and skills through extensive priority, and MoMo is now live in South Africa. In Nigeria, we training available digitally, face-to-face and from other received our super-agent licence and by December 2019 sources supplied by the MTN Academy, or from external had 108 000 registered agents. accredited and reputable organisations. Our digital inclusion investments broadly span the financial, For details on MTN people and their remuneration please health, education, enterprise and public sector categories, refer to pages 56 and 57 and 72 to 97 of the MTN Group’s among others. More detail on MTN’s digital inclusion 2019 integrated report. initiatives can be found in the 2019 MTN Group sustainability report in the integrated reports link on our website 3. Corporate social investment (CSI) www.mtn.com. MTN believes it has an important role to play in building sustainable societies and as a result we leverage our core capabilities to enable the socio-economic development of

MTN Group Limited Tax report for the year ended 31 December 2019 03 Current tax environment

MTN has an extensive footprint, with operations and head The following graph illustrates the group’s EBITDA† margin office companies in 24 countries across Africa and the in comparison to the minimum and maximum EBITDA† Middle East. Tax legislation and transfer pricing rules and margins realised by competitors in the region for the period regulations vary from country to country and consequently 2015 to 2018. we operate in a complex and diverse tax environment. (%) The international tax landscape continues to evolve and the Organisation for Economic Co-operation and 60 49.67 Development’s (OECD) work on base erosion and profit 50 46.52 48.01 48.28 shifting (BEPS) continues. 40 42.45 34.65 35.37 35.85 26.54 25.71 27.07 MTN Group has always paid attention to these developments 30 22.20 with the most recent being published during 2019 whereby 20 the OECD Secretariat put forward, and the inclusive 10 framework adopted, a proposal for a “Unified Approach” under pillar one and the “Global Anti-Base Erosion Proposal 0 2015 2016 2017 2018 (GloBE) – pillar two”. Minimum of African peers Maximum of African peers The Unified Approach under pillar one inter alia seeks to MTN (excluding Nigeria fine) allocate profits earned or losses made by a multinational group company to the market jurisdictions (ie countries of the operating entities such as the MTN opco) over and The graph that follows shows the different levels of above the profit or loss that is already realised in country by profitability within the worldwide telecommunication the operating companies. If this proposal is successful, this industry value chain, from 2015 to 2018. The graph also would represent a major change of the international tax/ illustrates MTN Group’s “unique synergy” premium above transfer pricing system in the last century. the profitability of its peers from 2015 to 2018 (adjusted for the fine in Nigeria). The group has an extensive footprint across Africa and the Middle East, and operates on a decentralised basis. MTN outperformed its peers by 3,5% of the group’s EBITDA†. Consequently, the group applies its transfer pricing on a The differential is inter alia attributable to brand equity, transaction-by-transaction basis. procurement and other synergies unique to the group.

During 2018 and 2019, the group undertook a value chain 45 analysis (VCA) which is a corroborative economic analysis 3,5% 38,2% 1,8% 34,7% which evaluates the group’s performance relative to its 35 27,5% 32,9% peers, and how value (ie EBITDA†) manifests between: (a) group companies which do not engage with customers; 25 and 15 (b) the MTN opcos who engage with customers. 6,4% 5 (1,1%) The VCA exercise was done to gain insight into the relative (5) contributions made by each entity to the overall business.

Consequently, the group sought to assess whether the MVNO profit realised by the MTN opcos: Nigeria fine)

(a) aligns with the functions, risks and the assets of those Market share African market group companies (as a stress test for the BEPS project); Ownership and benefits/licences results (excluding telecom company MTN consolidated Market premium – MTN Group unique

and synergies premium

(b) is realised in country (as a stress test of the proposals in tier telecom company Average return US top network infrastructure operation of tower and the Unified Approach). Average return African At At Above threshold target target Also, as additional context, we noted that competitors of Most, if not all, MTN opcos compete favourably with their 5 MTN in the region over the period 2015 to 2018 realised an peers. They have consistently achieved attractive profit † average EBITDA margin of 34,7% as compared to the margins, and have taken reasonable tax positions in the weighted average of 38,2% achieved by MTN (excluding the countries within which they operate. impact of the fine in Nigeria).

5 No peer data was available for 2019 at the time of preparation of the integrated report. † EBITDA was on IAS17 basis.

04 MTN Group Limited Tax report for the year ended 31 December 2019 MTN’s approach to tax

Tax governance Tax risk management The MTN Group board understands and takes accountability One of the fundamental pillars of MTN’s approach to tax is for all risks that potentially affect the achievement of its a tax risk management framework aimed at ensuring that strategic priorities. Derived from an assurance methodology, tax risks are properly identified, prioritised and managed in MTN has implemented robust risk management frameworks accordance with MTN Group’s integrated risk management consisting of proactively identifying and understanding the process. The group board and group audit committee factors and events that may impact our strategic priorities, provide oversight over the tax risk management framework then managing them through effective mitigation plans, considering the potential financial, legal, business and internal controls and monitoring and reporting processes. reputational risk of failing to detect and manage tax risks timeously. The way MTN Group manages its tax affairs is directly relevant to its shareholders and other internal and external Regular and transparent tax reporting is embedded within stakeholders. Considering an increasingly complex tax the governance structures of the group, including the group legislation environment, multiple regulatory requirements, audit committee, executive committee and the group board. and the focus of revenue authorities in protecting their tax revenues through the tightening of rules, increased Tax risk reporting is achieved through the tax risk enforcement and improvement of their approach to tax management programme. Reporting is done quarterly to collection, there is an increased focus on tax risk and in-country and the group board of directors and audit controls that will mitigate tax risk to an acceptable level. committees.

To this end, the MTN Group has developed a systematic This process ensures that all tax risks across the countries approach to manage tax obligations and tax risk considering within which MTN operates are identified, measured, that tax obligations and the associated risks are managed controlled and monitored within the tax risk tolerance levels and monitored by many different personnel, business and managed at the highest governance levels within the functions, systems and processes within the group. group.

Principles governing MTN’s approach to tax MTN Group has agreed the following tax guiding principles Group board

that support its approach to tax: Tax risk management reporting ●● It is paramount to the MTN Group that its tax affairs are managed in such a manner so as not to cause a Group audit committee detrimental effect on the reputation or brand of the MTN Group. Accordingly, the commitment of the MTN Group is to act responsibly and in an accurate, transparent and timely manner in respect of its tax affairs by fulfilling all Group exco compliance, disclosure and reporting obligations, in accordance with the prevailing tax laws in all jurisdictions in which it operates; Group enterprise risk ●● The MTN Group seeks to create and manage shareholder management value by undertaking legitimate and responsible tax Group tax planning within the tax laws and regulations of the countries in which MTN Group operates. In this regard, Opco board the MTN Group acknowledges that its tax contribution in Opco risk and audit committee the jurisdictions in which it operates is significant and Opco enterprise risk manages such obligations in a proactive and forward- management looking manner and in accordance with the prevailing Opco tax department legislation; ●● MTN is committed to transparent and constructive For details on our approach to risk refer to page 26 of the relationships with revenue authorities. These are based 2019 MTN Group integrated report. Our tax risk appetite is on open and honest communication. The need to foster very low. We believe all taxes justifiably due must be paid. strong relationships with revenue authorities is critical to ensure the management of tax risk; Uncertain tax positions ●● The group commits to ensure there is the necessary The group operates in numerous tax jurisdictions and the resource capacity and capability to manage its tax group’s interpretation and application of the various tax affairs in an efficient and effective manner, including rules applied in direct and indirect tax filings may result in investing in tax knowledge and training of tax resources disputes between the group and the relevant tax authority. to ensure they have the requisite skills and knowledge; Tax legislation is often subject to interpretation, particularly and in the absence of established case law, and as such, creates ●● Tax is integrated into all business processes supported areas of uncertainty on which management is required to by adequate and robust controls, clear lines of make judgements. communication, defined roles and responsibilities and financial systems that are adequately configured for specific tax requirements and controls.

MTN Group Limited Tax report for the year ended 31 December 2019 05 MTN’s approach to tax (continued)

The tax risk management programme, through its ●● Commitment to early resolution of tax disputes with governance, provides for robust processes and controls in revenue authorities; evaluating the tax provisions and the classification and ●● Do not use any influence to seek preferential or extra- disclosure thereof, and is an effective enabler in the statutory treatment in tax rulings or settlements; and reporting of these matters. In arriving at the contingent tax ●● Seek to boost the capacity of revenue authorities in liabilities we have also applied IAS 37 guidelines. The poorer countries through positive and proactive relevant tax provisions and/or contingencies are discussed disclosure and cooperative working practices and to not and agreed with group tax and the group technical undermine revenue authorities’ capacity or independence. accounting teams and are communicated to external audit, the group audit committee and the group board. We believe in open communication and we meet with tax authorities on a regular basis to ensure that our business The group does not recognise liabilities in the statement of dealings are better understood by the authorities, to financial position until future events indicate that it is exchange perspectives on various matters in the course of probable that an outflow of resources will take place and a tax audits and follow-up questions. reliable estimate can be made, at which time a provision is raised. Contingent liabilities due to uncertain tax exposures We support the initiatives of the ATAF and closely follow all across the various tax jurisdictions where the group relevant tax and transfer pricing developments and operates amounted to R1 967m in 2019 (R2 087m in 2018). endeavour to be compliant with all relevant regulations including guidelines by organisations like the OECD. The most significant contingent tax matters relate to a transfer pricing disputes across our operating companies Tax havens in the tax jurisdictions where we operate. Based on internal The OECD set out four factors to be considered for and external legal and technical advice obtained, the group identifying tax havens: (1) no or nominal tax is levied on remains confident that it has a robust legal case to contest relevant income; (2) lack of effective exchange of these exposures. information; (3) lack of transparency; and (4) no substantial activities. As mentioned in the foreword, in January 2020, Nigeria’s AGF referred the matter of disputed back taxes to the tax MTN has subsidiaries in jurisdictions that may be defined and customs authorities and withdrew a demand for as tax havens. The reason for their existence in these US$2bn from MTN Nigeria. MTN Nigeria consequently jurisdictions is always based on sound business principles withdrew its legal action against the AGF. and not merely to obtain a tax benefit. MTN International (Mauritius) Limited and MTN (Mauritius) Investments Relationships with revenue authorities Limited, which are registered in Mauritius, are tax residents In respect of dealings with revenue authorities, the MTN in South Africa. Group values a good working relationship and maintains these relationships based on the following key principles: Advocacy or lobbying activity ●● Transparent, open and honest communications based MTN seeks to engage openly and proactively with national on credibility and integrity, thereby building mutual trust; and international organisations on matters of tax policy ●● Full disclosure of all relevant information; and potential changes to tax legislation to ensure ●● A high level of responsiveness to revenue authorities’ regulations promote sustainable investment in the queries, by dealing with such in a timely and efficient territories in which we operate. This includes information manner; sharing and requesting input on whether subjects for consultation and lobbying are in place or have been monitored in other countries.

06 MTN Group Limited Tax report for the year ended 31 December 2019 Continuous improvement on tax governance and transparency

IFRIC 23 The King IV Code’s fundamental concept regarding tax is We have adopted IFRIC 23 and reclassified certain tax that: provisions to liabilities in the current and prior year. There ●● The governing body should be responsible for a tax policy is no requirement for disclosure of remote tax exposure that is compliant with the applicable laws, but that is also items with less than 10% possibility of materialising. congruent with responsible corporate citizenship, and that takes account of reputational repercussions. Tax technology improvement across MTN opcos As part of our drive to improve MTN tax governance and King IV defines the governing body as among others, the transparency, in 2016 we embarked on a tax technology board of directors of a company. From a tax perspective in review across the whole of MTN and completed this project 2019, we strived to adhere to the King IV principles as in 2017. The result was a roadmap stipulating the type of follows: tax systems we can implement or improve to better our tax ●● Part 5.1: Leadership, ethics and corporate citizenship governance, compliance and transparency objectives. (Principles 1-3): Tax governance considerations

In following the roadmap, in 2017 we began with the With the help of internal auditors, the group audit configuration of our tax provisioning system for the whole committee monitors adherence to the tax strategy and MTN Group. This configuration was completed and policy on a regular basis. A report on these audits is implemented in 2018. The system was configured to handle presented to the group audit committee. the preparation and reporting on tax provisions, total tax contribution and tax risk registers. Training was offered to ●● Part 5.2: Strategy, performance and reporting (Principles all tax teams across all MTN entities. The system is now 4-5): Tax transparency being used by all our operating companies across the MTN group on a test basis until all the necessary system audits When publishing the integrated report every year in are finalised. We anticipate to fully use the system for March, we also publish a separate tax report. In this tax reporting of 2020 tax provision numbers. report we include detailed information about the group’s total tax contribution, on which we have obtained limited The configuration of a tax system to further enhance our assurance from an independent external assurance transfer pricing and country-by-country reporting was provider since 2016. postponed in 2019 due to the reappointment of a more appropriate service provider. The configuration of this We prepared and submitted our 2018 country-by-country system will resume in 2020. report to the South African Revenue Service.

Independent assurance review of group total tax Refer to ‘Tax technology improvement across MTN contribution (TTC) number opcos’ section regarding the tax technology review and As part of our drive and commitment to improving implementation progress as a drive to improve our transparency and to increase the credibility of our total tax performance, reporting and transparency. contribution number, we engaged PwC to perform a limited assurance review of our total group TTC number in ●● Part 5.4: Governance functional areas (Principles 11-13 accordance with International Standard on Assurance and 15): Tax function and tax risk framework Engagements (ISAE) 3000 (Revised): Assurance consideration Engagements other than Audits and Reviews of Historical Financial Information, issued by the International Auditing The tax function is adequately resourced. and Assurance Standards Board. The assurance to this number has been marked throughout the report. For details In 2019 we updated our group tax strategy and policy and of the scope of work, procedures and outcome of the review had them reviewed and approved at the group audit of the total group TTC number, please refer to the committee (and by the group board of directors). We also independent assurance report on non-financial data on our had these updated approved group tax strategy and website www.mtn.com. policy documents rolled out and adopted by our operating companies across the MTN group. Our tax strategy and Adoption of King IV Code on Corporate GovernanceTM policy stipulate MTN’s organisational risk appetite and (King IV Code) principles risk level tolerance. As advised by the group audit Some of the main objectives of King IV are to: committee, we have recently started the review of the ●● Promote corporate governance as integral to running an group tax strategy and policy to ensure continued organisation and delivering governance outcomes such relevance in terms of tax governance and tax risk as an ethical culture, good performance, effective control management. and legitimacy ●● Reinforce corporate governance as a holistic and The tax risk management framework is stipulated within interrelated set of arrangements to be understood and the group tax strategy and policy. implemented in an integrated manner ●● Encourage transparent and meaningful reporting to In line with the tax strategy and policy, tax risk registers stakeholders are updated regularly and reported to the audit ●● Present corporate governance as concerned with not committees on a quarterly basis. only structure and process, but also with an ethical consciousness and conduct. ●● Part 5.5: Stakeholder relationships (Principles 16): Tax stakeholder relationships

* Copyright and trademarks are owned by the Institute of Directors in South African NPC and all of its rights are reserved. Our tax policy details guidance on how we should relate with our stakeholders to ensure a harmonious relationship that balances the needs, interests and expectations of our stakeholders and the best interest of MTN. This is also aligned with our stakeholder engagement policy. MTN Group Limited Tax report for the year ended 31 December 2019 07 Total tax contribution and effective tax rates

The total tax contribution represents payments made by the MTN Group (including the MTN proportionate share of Total tax contribution by opco region (Rbn) joint ventures and associates) to all spheres of governments within the regions in which we operate. The amounts 35 represent actual cash payments made in the respective financial year rather than the tax charge as reported in the 30 3,20 25 6,68 income statement. 3,49 20 9,35 7,12 Total value: R30,56bn (2018: R24,1bn) – 26,6% increase LA 15 10 6,86 2019 2018 6,69 5 4,18 % % 4,61 0 2,41 South Africa 16,1 10 2019 2018 Nigeria 22,0 17,5 SEAGHA7 30,5 28,5 South Africa Nigeria SEAGHA WECA8 21,9 29,5 WECA MENA MENA9 10,5 14,5 100 100 6 The R30,5bn total group TTC number was independently assured. Please refer to the integrated report link in our website www.mtn.com for the independent assurance report by PwC. 7 SEAGHA region: Uganda, Ghana, Rwanda, Zambia, South Sudan, MTN proportionate share in eSwatini and Botswana. 8 WECA region: Cameroon, Ivory Coast, Benin, Guinea-Conakry, Congo- Brazzaville, Liberia and Guinea-Bissau. 9 MENA region: Syria, Sudan, Yemen, Afghanistan, Cyprus (sold during year 2018) and MTN proportionate share in Iran. LA Limited assurance obtained

Total tax contribution by country and region This table reflects the total of all tax amounts and government levies paid in respect of the 2019 and 2018 financial years classified by opco country and regions.

Total tax contribution by country and region:

2019 2018 2019 2018 Proportionate Proportionate Proportionate Proportionate contribution contribution TTC TTC Country Rm Rm % % South Africa 4 614 2 410 15,11 10,02 Nigeria 6 690 4 175 21,91 17,36 Uganda 2 562 1 833 8,39 7,62 Rwanda 687 501 2,25 2,08 Zambia 615 644 2,01 2,68 South Sudan 217 72 0,71 0,30 Botswana (joint venture) 100 100 0,33 0,41 Swaziland (joint venture) 69 72 0,23 0,30 Ghana 5 102 3 643 16,71 15,15 Total SEAGHA 9 353 6 864 30,63 28,54 Cameroon 1 550 1 608 5,07 6,68 Ivory Coast 2 121 3 337 6,95 13,87 Benin 1 350 783 4,42 3,26 Guinea-Conakry 385 320 1,26 1,33 Congo-Brazzaville 959 763 3,14 3,17 Liberia 187 180 0,61 0,75 Guinea-Bissau 128 124 0,42 0,52 Total WECA 6 679 7 116 21,87 29,58 Iran (joint venture) 1 355 1 284 4,44 5,34 Syria 1 1 – – Sudan 513 420 1,68 1,75 Yemen 696 869 2,28 3,61 Afghanistan 636 697 2,08 2,90 Cyprus – 217 – 0,90 Total MENA 3 200 3 489 10,48 14,50 Total contribution 30 536 24 054 100,00 100,00

08 MTN Group Limited Tax report for the year ended 31 December 2019 Total tax contribution and effective tax rates (continued)

Total tax contribution and effective tax rates (R’m)

7 000

6 000 5 671 5 000 4 000 2 840 2 441 3 000 2 446 2 306 1 972 2 218 1 339 2 000 1 459 1 033 1 102 690 613 442 406 437 400 375

1 000 342 321 1 10 259 291 204 0 0 10 3 0 215 0 0 1 177 168 117 121 67 0 0 0 0 13 0 24 South Africa Nigeria SEAGHA WECA MENA

Corporate tax Education tax Dividends tax Indirect taxes WHT taxes Payroll taxes Property rates Operating licence fees Other

Total tax contribution collected by MTN (Rbn) Total tax contribution borne by MTN (Rbn)

3,0 30 0,3 2,5 0,5 2,8 1,9 0,1 2,0 0,9 0,5 0,3 1,8 20 15,2 2,1 2,7 1,5 0,4 1,0 1,4 11,9 10 0,5 0,3 0,4 0 0,2 (0,1) 7,0 4,1 (0,5) 0 2019 2018 2019 2018

Dividend tax Payroll taxes Product taxes Corporate tax Education tax Indirect taxes Payroll taxes Operating licence fees Other Dividend tax Withholding taxes

MTN Group Limited Tax report for the year ended 31 December 2019 09 Total tax contribution and effective tax rates (continued)

Group effective tax rate (GETR) reconciliations

2019 2018 Consolidated group % % Comment MTN Group 39,25 36,18 This is GETR as reported on the annual financial statements. Please refer below for the breakdown and comments. MTN Group 41,20 38,12 This is normalised GETR. Please refer below for the breakdown.

Reported group effective tax rate reconciliation Reported group effective tax rate 39,25 36,18 Higher rate in 2019 mainly due to higher unrecognised deferred tax credit from assessed losses and temporary differences, higher withholding tax, and higher prior year deferred tax audit adjustment. Main reconciling items: Other 0,6910 0,9511 Sudan non-deductible expenses (2,32) (2,55) Turnover tax applied with result that bulk of operational expenses and loss not allowable for tax purposes, ie a tax at 7% of (Turnover and Other Income) less: (interconnect, roaming and transmission costs, and commission and discounts). Lower impact in GETR because higher group profit before tax of R17,6bn (R15,0bn in 2018) against slightly higher expense in 2019 (R1,46bn gross amount and R1,37bn in 2018). Non-taxable gain from Jumia 1,65 – In 2019 this related to a gain realised on dilution of dilution and sale of Amadeus and Jumia. TravelStart Non-deductible CBN resolution – 1,39 expense Non-taxable gain from MTN – 3,94 This relates to a gain realised of R2,11bn on the sale of Cyprus sale MTN Cyprus opco. Nigeria regulatory fine and related (0,31) (2,16) This item includes unwinding interest on the Nigeria fine expenses liability and the amortisation of fees related to the listing of MTN Nigeria. Lower impact to GETR due to lower Nigeria fine unwinding expenses in 2019 (R0,20bn) compared to 2018 (R1,16bn). Foreign income and withholding (6,02) (5,80) Higher withholding tax value. In 2019 (R1,06bn) taxes compared to 2018 (R0,87bn). Assessed loss and other timing (2,93) (1,73) This relates to unrecognised deferred tax credits on differences on which deferred tax assessed losses and other timing differences mainly in credit was not recognised South Sudan, Conakry, Afghanistan, Liberia, Netherlands and Smartvillage due to not meeting requirements of IAS 12 for recognition of a deferred tax asset. Disallowed interest expenses (2,01)12 (2,22) Standard effective tax rate 28,00 28,00 10 This mainly consists of: Share of losses from MTN joint ventures and associates (+1,12%); Nigeria investment allowances relief/Cameroon reinvestment allowance (+1,33%); foreign tax rate adjustment to RSA standard rate (+4,45%); Nigeria education tax (-2,04%); Ghana special levy (-5%) of IFRS PBT (-1,09%); other non-deductible expenses (-1,82%); section 9D imputation (net income of controlled foreign companies (-0,46%); prior year deferred tax audit adjustment (-0,91%); additional minimum tax (mainly from Cameroon, Liberia, Guinea-Bissau, Syria and Conakry) (-1,07%) and other miscellaneous (+1,18%). 11 This mainly consists of: Share of losses from MTN joint ventures and associates (-0,98%); Nigeria investment allowances relief/Cameroon reinvestment allowance (+1,25%); foreign tax rate adjustment to RSA standard rate (+3,67%); Nigeria education tax (-1,99%); Ghana special levy (-5%) of IFRS PBT (-1,01%); other non-deductible expenses (-2,23%); and other miscellaneous (+2,24%). 12 This mainly relates to non-deductible interest expense incurred in MTN Holdings (Proprietary) Limited and MTN Mauritius Limited (two of the group’s holding companies).

10 MTN Group Limited Tax report for the year ended 31 December 2019 Total tax contribution and effective tax rates (continued)

Normalised group effective tax rate reconciliation

2019 2018 % % Comment Normalised group effective tax 41,20 38,12 This is GETR as reported on the annual financial rate:15 statements. Please refer below for the breakdown and comments. Main reconciling items This is normalised GETR. Please refer below for the breakdown. Other 0,716 +2,8617 Sudan non-deductible expenses (2,4) (2,7) Turnover tax applied with result that bulk of operational expenses and loss not allowable for tax purposes, i.e. a tax at 7% of (Turnover and Other Income) less: (Interconnect, Roaming and Transmission costs, and commission and discounts). Lower impact in GETR because higher group profit before tax of R17,6bn (R15,0bn in 2018) against slightly higher expense in 2019 (R1,46bn gross amount and R1,37bn in 2018). Non-taxable gain from Jumia – – Since this was a once-off transaction, we have removed dilution and sale of Amadeus and it for normalisation of GETR. TravelStart Non-deductible CBN resolution – – Since this was a once-off transaction, we have removed expense it for normalisation of GETR. Non-taxable gain from MTN – – Since this was a once-off transaction, we have removed Cyprus sale it for normalisation of GETR. Nigeria regulatory fine and related – – Since this was a once-off transaction, we have removed expenses it for normalisation of GETR. Foreign income and withholding (6,32) (6,12) Higher withholding tax value. In 2019 (R1,06bn) taxes compared to 2018 (R0,87bn). Assessed loss and other timing (3,07) (1,82) This relates to unrecognised deferred tax credits on differences on which deferred tax assessed losses and other timing differences mainly in credit was not recognised South Sudan, Conakry, Afghanistan, Liberia, Netherlands. Disallowed interest expenses (2,11)18 (2,34)19 Standard effective tax rate 28,00 28,00 15 Normalised group effective tax rate is calculated by dividing the group reported tax by adjusted group profit before tax. 16 This mainly consists of: Share of losses from MTN joint ventures and associates (+1,18%); Nigeria investment allowances relief/Cameroon reinvestment allowance (+1,40%); foreign tax rate adjustment to RSA standard rate (+4,67%); Nigeria education tax (-2,14%); Ghana special levy (-5%) of IFRS PBT (-1,15%); other non-deductible expenses (-1,91%); section 9D imputation (net income of controlled foreign companies) (-0,48%); prior year deferred tax audit adjustment (-0,96%); additional minimum tax (mainly from Cameroon, Liberia, Guinea-Bissau, Syria and Conakry) (-1,12%) and other miscellaneous (+1,21%). 17 This mainly consists of: Share of losses from MTN joint ventures and associates (-1,04%); Nigeria investment allowances relief/Cameroon reinvestment allowance (+1,32%); foreign tax rate adjustment to RSA standard rate (+3,87%); Nigeria education tax (-2,10%); Ghana special levy (-5%) of IFRS PBT (-1,07%); other non-deductible expenses (-2,35%); exempt income (mainly from Nigeria federal bonds and treasury bills) (+2,73%) and other miscellaneous (+1,5%). 18 This mainly relates to non-deductible interest expense incurred in MTN Holdings (Proprietary) Limited and MTN Mauritius Limited (two of the group’s holding companies). 19 This mainly relates to non-deductible interest expense incurred in MTN Holdings (Proprietary) Limited and MTN Mauritius Limited (two of the group’s holding companies).

MTN Group Limited Tax report for the year ended 31 December 2019 11 Total tax contribution and effective tax rates (continued)

Effective tax rates and standard corporate income tax rates by country

2019 2018 standard standard corporate corporate 2019 income tax 2018 income tax GETR20 rates GETR rates Country % %21 %22 % South Africa 30,54 28,00 26,78 28,00 Nigeria 30,31 30,00 34,31 30,00 Ghana 30,14 25,00 30,14 25,00 Uganda 29,00 30,00 28,65 30,00 Rwanda 44,93 30,00 46,27 30,00 Zambia 36,01 40,00 44,41 40,00 South Sudan 0,0023 25,00 0,00 20,00 Botswana (joint venture) 35,26 22,00 5,25 22,00 eSwatini (joint venture) 29,67 30,00 27,96 30,00 Cameroon (32,82)24 33,00 12,36 33,00 Ivory Coast 21,25 30,00 (4 377,64) 30,00 Benin 42,15 30,00 (0,52) 30,00 Guinea-Conakry (7,31)25 35,00 (1,56) 35,00 Congo-Brazzaville 26,15 22,5 16,00 15,00 Liberia (4,60)26 25,00 (2,78) 25,00 Guinea-Bissau (29,62)27 25,00 (13,43) 25,00 Iran (joint venture) 27,15 25,00 30,55 25,00 Syria 12,27 14,00 18,16 14,00 Sudan 39,38 7,00 28,62 5,00 Yemen 74,49 50,00 176,15 50,00 Afghanistan 20,19 20,00 (36,04) 20,00 Cyprus 28 12,50 10,47 12,50 20 These are all based on ZAR currency converted profit before tax and income tax expenses and are for the group in the applicable countries. 21 These are standard corporate income tax rates at the respective jurisdictions where our opcos operate. They are in line with their in-country Income tax legislations. 22 These are all based on ZAR currency converted profit before tax and income tax expenses and are for the group in the applicable countries. 23 MTN South Sudan made a tax loss. The deferred tax credit on assessed losses and other temporary differences was not recognised due to requirements of IAS 12 of the International Financial Reporting Standards not being met. 24 MTN Cameroon had an accounting loss but still levied tax due to minimum alternative tax rules in-country. And deferred tax credit was denied. 25 MTN Guinea-Conakry had an accounting loss but still levied a minimum tax. The deferred tax credit on assessed losses and other temporary differences was not recognised due to requirements of IAS 12 of the International Financial Reporting Standards not being met. 26 MTN Liberia had an accounting loss but still levied a minimum tax. The deferred tax credit on assessed losses and other temporary differences was not recognised due to requirements of IAS 12 of the International Financial Reporting Standards not being met. 27 MTN Guinea-Bissau had an accounting loss but still levied a minimum tax. The deferred tax credit on assessed losses and other temporary differences was not recognised due to requirements of IAS 12 of the International Financial Reporting Standards not being met. 28 MTN Cyprus was sold during 2018 financial year.

12 MTN Group Limited Tax report for the year ended 31 December 2019