MTN appeals tax tribunal’s $72.5 million fine

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MTN appeals tax tribunal's $72.5 million fine
MTN appeals tax tribunal's $72.5 million fine

MTN Nigeria Communications Plc has lodged an appeal against the judgment of the Tax Appeal Tribunal (TAT) regarding the payment of a $72.5 million fine to the Federal Inland Revenue Service (FIRS).

The telecommunications company made this announcement in a statement issued by Uto Ukpanah, MTN’s company secretary.

The TAT in Lagos had recently ordered MTN to pay $72,551,059 in tax arrears to FIRS.

The tribunal, led by A. B. Hamed, issued this order while delivering judgment in an appeal filed by MTN Nigeria, marked TAT/LZ/VAT/075.

The tribunal raised five issues for determination, with the first four resolved in favor of the FIRS and the fifth in favor of MTN, resulting in an order for MTN to pay the principal sum of $72,551,059.

The tribunal, however, absolved MTN from paying a penalty and interest on the principal sum, which amounted to $21,039,807.

In response to the tribunal’s decision, MTN Nigeria announced its intent to appeal and reassured the Nigerian Exchange Limited and the investing public of its commitment to fulfilling its tax obligations.

The tax dispute between MTN Nigeria and the FIRS dates back to 2018 when the Office of the Attorney-General of the Federation (OAGF) alleged that the company had underpaid taxes on its import duty and value-added tax (VAT).

This assertion was based on an investigation into the firm’s Forms A and M transactions between 2007 and 2017.

In 2018, the OAGF demanded approximately $2 billion in tax arrears from MTN Nigeria.

Following a series of engagements, the FIRS issued an initial assessment of $93.6 million, comprising $72.6 million as the principal tax liability and $21 million for penalties and interest on the principal amount.

After further engagements and an objection by MTN Nigeria, the FIRS revised the total assessment to $135.7 million, which included a principal tax liability of $47.8 million and interest and penalties of $87.9 million.

MTN Nigeria subsequently filed an appeal at the Tax Appeal Tribunal. The contentious issues revolve around the VAT payable on offshore training services, transponder services, software licensing, and upgrades.