By Adedapo Adesanya
MTN Nigeria has contracted the services of top audit and tax company, KPMG, as the tax dispute between the telecommunications company and the Federal Inland Revenue Service (FIRS) drags on.
The network provider had previously asked a tax tribunal to interpret the decision to pay corporate tax on the N330 billion fine slammed on it by the Nigerian Communications Commission (NCC) in 2015 for SIM infractions.
According to a report, the knowledge of KPMG about Nigerian tax matters will come in handy as the network provider seeks to avoid the tax demanded by the FIRS.
MTN Nigeria only completed payment of the N300 billion fine in May 2019 after negotiating the initial N1.04 trillion it was asked to pay by the industry regulator. The fine was for its alleged refusal to deactivate some unregistered SIM cards of its subscribers in 2015.
The commission later reduced the fine after much negotiation. The reduction was, however, on the condition that MTN Nigeria would list on the Nigerian Stock Exchange (NSE).
On May 31, 2019, MTN Nigeria concluded payment of the N330 billion fine and also listed on the country’s exchange on May 16 in fulfilment of the agreement.
But the FIRS queried the firm for deducting tax from the N330 billion fine it paid NCC. According to FIRS Chief, Babatunde Fowler, MTN does not have the right to deduct tax from the money paid to the NCC.
He insisted that fines and penalties for regulatory infractions are revenues paid to the federal government and should not be subjected to any tax deduction.
MTN Nigeria said it had gone ahead to request a judicial review of the Nigerian tax authority.
“We believe that the fine should be treated as part of the cost of running the business but the FIRS thinks otherwise.
“We’ve paid everything to the FIRS then we went to the tribunal and because the case is with the tax tribunal the government can’t access the money,” the company said in a statement.
Aduragbemi Omiyale