MTN chief faults AGF on $2b tax demand

MTN Group Chief Executive Officer (CEO) Rob Shuter yesterday faulted the demand for $2 billion cash by the Office of the Attorney-General of the Federation (OAGF).

It accused AGF Abubakar Malami, of “playing games” over the demand for the cash, which the government said was in tax arrears from the telecoms giant.

Shuter spoke at a conference call where MTN’s 2018 annual results were presented to the country’s executives and stakeholders.

Malami had last September written to MTN Nigeria, demanding the payment of $2 billion in tax arrears.

He broke the cash down to a 10-year period for import duties, Value Added Tax (VAT) and withholding taxes on foreign imports/payments.

MTN Nigeria had rejected the allegation, insisting that it had fully settled all outstanding taxes.

The telco also sued the AGF.

Reiterating the telco’s stance, Shuter described the legal process as “odd,” adding that the AGF had no right to collect tax on behalf of the Federal Government.

He said MTN is a responsible firm which tax assessments are in line with the requirements of the relevant authorities.

The transcript of the conference call reads: “I think if you look at our history for complicated tax disputes they can take years, because you end up going through this tribunal, that tribunal etc.

“Now, of course what’s odd about the Nigeria situation is it’s not the Commissioner for Inland Revenue that we have the dispute with. It’s the attorney-general, who is really not mandated to collect tax.

“So, the legal process is basically saying you’re playing a game that you’re not meant to be playing. And when we talk to the tax authorities they have no particular quarrel with where we are with our various assessments.

“So, either we get the thing chucked out early on and the issue is finished, or it is just one of these lingering things that rolls around in the system for a while. And personally I don’t know which way it’s going to play out.

“I’m just absolutely adamant that we’re a responsible company, we have paid the taxes we had to pay, and the tax authorities themselves aren’t saying that we owe them anything. So I think we’ve just got to stare this one down.”

Also commenting on the issue, the telco’s Chief Financial Officer, Ralph Mupita, said the telco has thoroughly double-checked its books without finding any remote exposure.

He said: “The audit committees of both Nigeria and (the) group, as you can well imagine, have gone through this very thoroughly in terms of all our tax exposures. And it’s the second time we’ve looked at this.

“We looked at it at the half year when it was then a tax assessment before the letters came in August.

“But we still believe there isn’t even a remote exposure that we would put in contingent liabilities. But I think it’s important to re-emphasise the point Rob raised.

“In the course of having any tax disputes with the authorities these things can take years. So if this thing rolls on it’s no different from a transfer pricing matter you may have a dispute with an authority in country x, y, z.”

The hearing of the suit against the AGF first scheduled for November 8 last year has been adjourned to March 26.