MTN Nigeria to Appeal $47.8m Tax Default Judgment

October 30, 2023
MTN Nigeria Obiageli Ugboma

By Bliss Okperan

MTN Nigeria Communications Plc has resolved to appeal the $47.8 million value-added tax (VAT) liability judgment of the Lagos State Tax Appeal Tribunal.

The tax court had ordered the telco last week to pay the Federal Inland Revenue Services (FIRS) the tax default for a period of 10 years.

In a statement on Monday, MTN Nigeria, which trades its stocks on the Nigerian Exchange (NGX) Limited, said it was not in agreement with the court decision.

“Having reviewed this outcome and considering input from tax and legal consultants, MTN Nigeria has resolved to appeal the decision of the TAT,” a statement obtained by Business Post disclosed.

Last week, this newspaper reported that the GSM service provider was asked to settle $72.6 million in VAT liabilities from 2007 to 2017.

Recall that in July 2021, the FIRS issued a VAT assessment of $93,590,366 to MTN, comprising $72,551,059 as the principal liability and $21,039,807 for penalties and interest on the principal sum (first assessment).

MTN objected to the first assessment and by the Notice of Assessment dated April 14, 2022, the tax body issued a revised assessment for $135,697,755 to the telecom giant as a revised assessment.

The principal amount of tax alleged to be outstanding and due from the Appellant (principal tax liability) in the revised assessment ($47,776,210), was less than the alleged principal tax liability contained in the first assessment, ($72,551,059), the interest and penalty imposed by the FIRS on the alleged principal tax liability in the revised assessment, ($87,900,000), is higher than the interest and penalty imposed by the FIRS on the alleged principal tax liability in the first assessment, ($21,039,807).

The FIRS consequently conducted a review of MTN’s tax and accounting records and upheld the OAGF’s alleged tax liability.

However, MTN and its tax consultant, KPMG Advisory Services, held a series of meetings with FIRS to resolve the tax dispute arising from MTN’s alleged tax liability.

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