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MTN denies new tax squabbles with Nigerian authorities

Samuel Mungadze
By Samuel Mungadze, Africa editor
Johannesburg, 31 Aug 2021
MTN Nigeria CEO Karl Toriola.
MTN Nigeria CEO Karl Toriola.

Another tax furore has reportedly erupted for MTN in Nigeria, prompting the telco to deny it is indebted to revenue authorities in its biggest market, after recent media reports suggested it owed millions in unpaid taxes.

The Guardian newspaper in Nigeria reported on Friday that MTN owed the Federal Inland Revenue Service (FIRS) $2 billion in tax, which had been previously quashed by authorities.

MTN announced in January 2020 that it had been let off the hook by Nigeria’s attorney-general after he withdrew the $2 billion tax claim.

However, on Friday, the Guardian newspaper quoted Zainab Ahmed, minister of finance, budget and national planning, as saying: “MTN is owing the government but there has been a payment plan undertaken with the FIRS they are following. They are in Nigeria and have investments all over the country and are following through with the payment commitment made with the FIRS.”

This prompted MTN to respond with a strongly-worded statement yesterday.

MTN, which has 68.9 million subscribers in Nigeria, says it provided evidence to authorities that demonstrates “full compliance with all tax and regulatory obligations, and discussions are ongoing in this regard”.

The Johannesburg-headquartered MTN Group has a footprint in 21 countries and Nigeria generates the lion’s share of the telco’s revenue.

It is a big employer and taxpayer in Nigeria. In a recent statement marking its 20th anniversary in the West African country, MTN said in the period, it had created 2.5 million jobs and contributed over $5 billion in taxes (over N2 trillion).

However, it has had persistent clashes with authorities over tax and other regulatory matters over the years.

Yesterday, MTN denied it is squabbling with Nigerian authorities again, saying that as recently as last year, the tax authorities commended the telco for its prompt payment of dues.

“In addition, when asked earlier this year, the company agreed to make advance tax payments ahead of established deadlines to support government’s revenue drive. This was also the case in 2020, when in response to a FIRS appeal to support government, MTN Nigeria made an early payment of its 2019 company income tax of N46.9 billion. The company did the same this year, between March 2021 and June 2021, making early payments of N95.5 billion for the 2020 company income tax, which was due on 30 June 2021.”

MTN, which this month appointed Troopti Desai as group tax boss, says it remains committed to conducting business in accordance with the applicable laws.

Nigerian operations have been the anchor market for MTN’s search for new sources of revenue, recording a blowout performance with increased uptake of its fintech business, which includes MoMo, insurance, airtime lending and e-commerce.

In the last financial year, MTN Nigeria fintech subscribers increased by more than eight times to 4.7 million, driving higher transaction volumes of over 51.5 million.

MTN Nigeria CEO Karl Toriola recently said MTN will invest over N600 billion to expand broadband access across the country.