Business

MTN Nigeria Appeals Tax Tribunal Judgment, Insists on Established Process

Following the recent ruling of the Lagos State division of the Tax Appeal Tribunal, which ordered MTN Nigeria to pay the sum of $72,551,059 in tax default to the Federal Inland Revenue Services (FIRS), covering the period from 2007 to 2017, the telecommunication company has resolved to appeal the judgment of the Tribunal.

Dissatisfied with the ruling, MTN Nigeria, disclosed its resolve to appeal the judgement in a statement on Monday, that was signed by the Company Secretary, Uto Ukpanah.

It stated: “On 20 October 2023, the Tax Appeal Tribunal (TAT) upheld the principal liability of $47.8 million and set aside the interest and penalty charges of $87.9 million. Having reviewed this outcome and considering input from our tax and legal consultants, MTN Nigeria has resolved to appeal the decision of the Tribunal.

“MTN Nigeria Communications Plc hereby notifies the Nigerian Exchange Limited and the investing public that the company received the decision of the TAT sitting in Lagos.

“The decision pertains to the VAT assessment for the periods covering 2007 and 2010 – 2017, as issued by the FIRS to the company.”

It pointed out that in 2018, the Attorney General of the Federation and Minister of Justice (AGF) had demanded approximately $2 billion in tax arrears from the company.

“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.

“After a series of engagements, the FIRS issued an initial assessment of US$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,” the statement added.

According to the telco, “to clarify the interpretation of the VAT Act’s provisions concerning the tax treatment of the transactions that led to the aforementioned assessments, MTN Nigeria filed an appeal at the Tax Appeal Tribunal (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.

“On 20 October 2023, the TAT upheld the principal liability of $47.8 million and set aside the interest and penalty charges of $87.9 million. Having reviewed this outcome and considering input from our tax and legal consultants, MTN Nigeria has resolved to appeal the decision of the Tribunal. We remain committed to meeting our tax obligations,” the statement further said.

Shedding more light on the issue, the Chief Corporate Services and Sustainability Officer at MTN Nigeria, Tobechukwu Okigbo, stressed that tax disputes were normal, adding that the process of resolving the disputes, when and if they arise, was important and MTNN was just following the process.

“It is therefore important to note that MTN’s argument has always been that it will follow established processes in this and any other tax dispute.

“Our robust challenge of the AG’s demand at the time was premised on tax issues being outside his remit. Disputes like this and how they are resolved helps build and strengthen the system, which makes it imperative for broader push for fiscal policy reforms which will improve affordability for consumers and incentivise investments by operators,” Okigbo said.

Meanwhile, MTN at the weekend, gave cash prizes totaling $10,000 to three winners of the 2023 MoMo Hackathon competition, which held in Lagos at the weekend.

Up to 20 start-ups were selected to pitch their technology solutions before seasoned judges who are experts in technology solutions. The pitch, which focused on how to integrate the MTN Mobile Money platform (MoMo) in making easy financial transactions across different payment channels in Africa, was guided by specific criteria such as scalability, clarity, comprehension and quality of solution that is commercially viable.

The competition, which was the first edition of the MTN MoMo Hackathon in Nigeria, came to an end at the weekend, with Oluwapelumi Yusuf, emerging as the winner.

Yusuf won the grand prize of $ 5,000 for inventing Rova Pay which incorporates MoMo APIs with features that transcend payment processing.

Rova Pay offers customers the convenience of making transactions anytime and anywhere using automated Unstructured Supplementary Service Data (USSD), which eliminates the need for internet services and manual code dialing.

Marvis Igbokwe, who partnered with Favour Ajie Divine to develop MoMo Cash, came second place with a cash prize of $3,000 while Isaac Odinaka Franklin’s solution, Clique Plus Pay, won third place with a cash prize of $2,000.

In addition, the top 12 participants received gifts and an invitation to the Pan African grand finale to represent Nigeria in the MoMo Hackathon.

The hackathon attracted tech developers, entrepreneurs, and innovators from various sectors, focused on developing solutions to accelerate financial inclusion and digitisation of payments in Africa.

Speaking on the importance of the MoMo Hackathon in the Nigerian fintech industry, the Chief Commercial Officer, MoMo PSB, Elsa Muzzolini, said: “At MoMo, we stand firm in our belief that innovation thrives not just within our brand, but within the collective of stakeholders.

“That is why we are equipping developers with the tools and resources necessary to expedite reaching individuals who are excluded from financial access or believe that financial services are not tailored to their needs.

“Our commitment to fostering financial inclusion is a collaborative effort. By making MoMo accessible to innovators across Nigeria, we enable them to leverage its full potential in developing applications that hold the power to transform lives.”

Oluwapelumi Yusuf, upon receiving his prize, expressed excitement, saying, “I am thrilled and honoured to have won the MoMo Hackathon 2023. My motivation for conceiving this solution was born during my visits to rural communities in Nigeria, where I witnessed the limitations imposed by the need for internet connectivity to access basic applications, particularly for payment purposes. I recognised the need to bridge this gap and support financial inclusion.”

The hackathon provided a unique opportunity for developers across 14 African countries including Nigeria, Ghana, Uganda, Ivory Coast, Cameroon, Rwanda, Eswatini, Congo Brazzaville, Guinea Conakry, Zambia, Benin, Liberia, South Africa, and South Sudan to further shape the future of digital finance and empower millions of people with access to comprehensive and life-changing financial services.

Emma Okonji