TheCable

MTN Nigeria Communications Plc has appealed the decision of the tax appeal tribunal (TAT) over the payment of $72.5 million fine to the Federal Inland Revenue Service (FIRS).

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

Recently, a TAT in Lagos ordered the telecom giant to pay $72,551,059 in tax default to FIRS.

A five-member panel of the tribunal led by A. B. Hamed gave the order while delivering judgment in an appeal marked TAT/LZ/VAT/075, filed by MTN Nigeria.

The tribunal had raised five issues for determination.

However, in its verdict, the first four issues were resolved in favour of the FIRS, while issue five was resolved in favour of MTN.

The tribunal, thereby, ordered MTN to pay the $72,551,059 principal sum.

The tribunal also absolved MTN from paying the sum of $21,039,807 as penalties and interest on the principal sum.

Reacting to the judgement on Monday, MTN Nigeria said it has “resolved to appeal the decision of the tribunal”.

The telecom giant, therefore, assured the Nigerian Exchange Limited and the investing public of its commitment “to meeting our tax obligations.”

WHAT LED TO THE TRIBUNAL

The dispute between MTN Nigeria and the FIRS dates back to 2018, when the office of the attorney-general of the federation (OAGF) issued a report alleging that the company had underpaid taxes on its import duty and value-added tax (VAT).

The OAGF’s report was based on an investigation into the firm’s Forms A and M transactions between 2007 and 2017.

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

“In 2020, the AGF withdrew from the case and transferred the Form A-related transactions valued at $1.3 billion to the FIRS and the balance to the Nigerian Customs Service (NCS) to resolve the contentious issues,” the statement reads.

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

“Following an objection by MTN Nigeria and further engagements, the FIRS issued a revised total assessment of $135.7 million, representing a principal tax liability of $47,8 million and interest and penalty of $87.9 million.

“MTN Nigeria filed an appeal at the TAT.”

The transactions in question primarily involve the alleged VAT payable on offshore training services provided to employees of the company, transponder services provided by a non-resident company, and software licensing and upgrades.