Tax tribunal orders MTN to pay $72.5m

The Lagos State division of the Tax Appeal Tribunal has ordered MTN Nigeria Communications to pay $72,551,059 in tax default to the Federal Inland Revenue Services from 2007 to 2017.

However, the Tribunal absolved the telecommunication firm from paying the sum of $21,039,807 as penalties and interest on the principal sum.

A five-person panel led by Professor A. B. Hamed gave the verdict and order recently while delivering judgment in an appeal numbered TAT/LZ/VAT/075, filed by the telecommunication company against the request by the FIRS to pay the default.

The Office of the Attorney General of the Federation released a report on its investigation into MTN’s Forms A and M transactions sometime on May 10, 2018, according to the processes submitted before the appeal. The accounting years 2007 through 2017 were addressed in the study.

However, the OAGF revised the section pertaining to VAT and Withholding tax (WHT) to $1.284 billion (Form A invisible transactions) in a revised report dated August 20, 2018, while also adjusting the alleged outstanding in respect of import duty and VAT to the tune of N242.2 billion (Form M -visible transactions).

The FIRS assessed the MTN $93, 590, 366 million in VAT in July 2021. The principal debt in this assessment was $72,551,059 million, and the penalties and interest on the principal amount (first assessment) totaled $21,039,807 million.

Following MTN’s objection to the initial assessment, the FIRS further examined the evaluation.

As a result, the Respondent issued a revised assessment for US $135,697,755 million to MTN by the Notice of Assessment dated April 14, 2022.

Additionally, MTN protested to the FIRS’s new assessment in a letter dated May 13, 2022. FIRS then told MTN in a letter dated June 16 with reference number FIRS/TID/LOS/2020/0213/01 that it would not be changing the amended assessment.

“In the end, it is the decision of the Tribunal that issues one to four discussed above are all resolved in favor of the Respondent, and the Appellant is therefore ordered to settle the assessed liabilities accordingly,” the Tribunal declared after reviewing all of the processes filed by the parties and citing a plethora of authorities.

Nevertheless, this Honorable Tribunal has decided that the appellant is correct on issue five, which relates to penalty and interest, and has so set it aside. This serves as our judgment.