The Story Of MTN Trouble Isn’t Over Yet As FG Demands $2Billion Tax Arrears

The federal government through the attorney general of the federation and minister of justice, Mr Abubakar Malami, has demanded from the mobile operator, MTN Nigeria, the refund of government’s accumulated tax arrears of $2billion owed over the last 10 years.

“The attorney general notified MTN that his office made a high-level calculation that MTN Nigeria should have paid approximately $2bn in taxes relating to the importation of foreign equipment and payments to foreign suppliers over the last 10 years,” a statement signed by the Public Relations Manager, MTN Nigeria Limited, Funso Aina, stated on Tuesday.

The fresh demand is coming barely one week after the Central Bank of Nigeria asked the Africa’s telecoms giant and its bankers to repatriate $8.1bn it allegedly paid as dividends between 2007 and 2015.
In August 2018, MTN submitted documentation to the office of the AGF of its initial assessment of the full period which indicates that total payments made to the tax authorities in regard to these foreign imports and payments in aggregate are $700 million.
However, yesterday, the AGF demanded that MTN return to government coffers the balance that was underpaid. With this development, the network operator has fallen shorts of payment of $1.3 billion in tax relating to, inter alia, import duties, VAT and withholding taxes on foreign imports/payments.

MTN Nigeria said an initial assessment of the period indicated that total payments made to the tax authorities with regard to the foreign imports and payments amounted to $700m, adding that it had fully settled all taxes on the imports under scrutiny.

The company said after it had presented its documents to the Nigerian authorities, the government insisted on recovering the $2bn from it.

It expressed regret that despite its engagement with the Nigerian authorities on Certificates of Capital Importation and the multiple tax assessments conducted by the Federal Inland Revenue Service that were satisfactorily concluded, the matters were being revisited.

Speaking on the attorney general’s demand notice for historical tax obligations, MTN’s Corporate Relations Executive, Tobe Okigbo, was quoted as saying, “MTN has conducted a detailed review of these claims and provided evidence of tax remittance to the attorney general’s office. The attorney general’s notice indicates that he is rejecting this evidence.

“We believe that all taxes due to the Nigerian government have been paid and these allegations have not been raised by any of the revenue generating agencies that MTN engages with regularly, and from whom MTN has received numerous awards for compliance.”

Providing further clarification on the accusation of illegal repatriation of funds, Okigbo said all dividend repatriation by MTN Nigeria to its shareholders was done on the basis of its equity capital and dividend was declared with valid CCIs, adding that no preference dividend was declared.

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