MTN, FIRS disagree over Tax matters

The South telecommunications Company, MTN Nigerian and the Federal Inland Revenue Service (FIRS) have disagree over the tax matter on the N330 billion fine  imposed on it by the telecommunication regulator, Nigerian Communications Commission (NCC) in the year 2015.

Recall that, MTN Nigeria incurred a record $5.2 billion fine over its failure to deactivate 5 million unregistered SIM cards. The fine was reduced to $1 billion (N330 billion) after a series of negotiations over the three years on the terms that MTN enlists on the Nigerian Stock Exchange (NSE).

The telco confirmed to have fulfilled the agreement including listing on NSE earlier this year.

Nevertheless, MTN Nigeria disagree with FIRS position on tax-deductible.

According to the Executive Chairman, FIRS, Babatunde Fowler, the Nigerian subsidiary of the South African telco have no right on deducting tax from the N330 billion fine imposed by the Nigerian Communications Commission.

Fowler maintained that fines and penalties for regulatory infractions were revenues paid to the Federal Government and should not be subjected to any tax deduction.

Querying why MTN Nigeria considered fine and penalty as tax-deductible, he stated that “the alternative is for MTN to go to court and let the court (maybe Supreme Court) say the FIRS was wrong, and that such fines or penalties are tax-deductible”.

On its part, the telcos acknowledged to have technical disagreement between MTN and the Federal Inland Revenue Service (FIRS) as to how the fine should be treated for tax purposes.

In the report made available to Business Remarks, MTN Nigeria noted that their organization is open to further discussion.

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“While the monies have been paid to FIRS, we have taken the disagreement to the Tax Tribunal set up by FIRS Chairman and Minister of Finance, and are awaiting a decision.

“MTN remains fully compliant with Nigerian tax laws and will abide by the findings of the tribunal.

“Our company is committed to meeting its fiscal responsibilities and contributing to the social and economic development of Nigeria”, he said.

In addition, MTN Nigeria highlighted that as a law abiding organisation it has invested more than NGN2 trillion into the Nigerian economy and has paid more than NGN 1.7 trillion in taxes, levies and other regulatory fees.