N300bn fine: MTN drags FIRS to court

Telecommunication giants, MTN Nigeria, has asked a tax tribunal to quash the decision to pay corporate tax on the N330 billion fine for SIM infraction slammed on it by the Federal Inland Revenue Service (FIRS).

Recall that MTN Nigeria was in a fresh imbroglio for deducting tax from the N330 billion it paid the Nigerian Communications Commission (NCC) for SIM card infraction.

The NCC had in October 2015 imposed a fine of N1.04 trillion on the telecommunications giants for non-compliance with a deadline set by the Commission to disconnect all unregistered SIM cards. The move by NCC followed accusations by mobile phone users that the regulator had failed to bring operators to account for poor services to subscribers.

The regulator later reduced the fine to N780 billion in December 2015 having taken into consideration the stability of the telecommunication sector. The fine was further reduced to N330 billion after MTN agreed to be listed on the Nigeria Stock Exchange (NSE). These agreements have now been fulfilled by MTN, including the listing of 20.3 billion shares in May this year.

In a statement signed by MTN’s Corporate Affairs Manager, Onome Okwah, the telecommunications giants, said that it had a technical disagreement with FIRS on the tax deductions from the fine.

The firm has therefore taken its grievances to a tax tribunal set up by the Executive Chairman of FIRS, Tunde Fowler, who is also the Chairman of the Joint Tax Board (JTB).

“MTN remains fully compliant with Nigerian tax laws and will abide by the findings of the tribunal. The company is committed to meeting its fiscal responsibilities and contributing to the social and economic development of Nigeria,” Okwah said.

MTN Nigeria has gone ahead to request a judicial review of the Nigerian tax authority, and the Federal Inland Revenue Service said it was utterly displeased with the company’s accounting treatment of the fine as an operating cost. MTN, however, responded thus “we believe that the fine should be treated as part of the cost of running the business but the FIRS thinks otherwise.

“We’ve paid everything to the FIRS then we went to the tribunal and because the case is with the tax tribunal the government can’t access the money.”

While the FIRS is yet to provide further clarifications on recent claims by MTN, the development suggests that if the tribunal rules otherwise, MTN may be setting itself up for another fresh ordeal.