Nigeria withdraws MTN multibillion-dollar tax claim

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Pan Africa telecoms company, MTN, is off the hook in Nigeria following the country’s attorney-general’s decision to withdraw a $2 billion tax claim.

MTN Nigeria's tax battle with the country's attorney-general had been ongoing since September 2018 after it was slapped with claim for back taxes of $2 billion.

Nigeria is MTN's biggest market, accounting for a third of the African telecoms giant's annual core profit.

Subsequent to the claim, MTN Nigeria commenced legal action in Lagos against the attorney-general, leading to months of a bruising court battle.

On Friday, MTN announced it was off the hook.

“MTN Nigeria has been informed by means of a letter received by its legal counsel and dated 8 January 2020 that following careful review and due consultation with relevant statutory agencies, the attorney-general has decided to refer the matter to the relevant authorities, being the Federal Inland Revenue Service (FIRS) and Nigeria Customs (NC), with a view to them resolving the issues.

“Accordingly, the attorney-general has withdrawn its letter of demand for the aforementioned USD2 billion that was issued in August 2018,” it said.

Africa’s leading carrier said it will consequently follow due court process to withdraw its legal action and engage with FIRS and NC on the issue.

It said: “MTN remains committed to building and maintaining cordial relationships with all regulatory authorities in Nigeria.”

The attorney-general’s decision will come as a relief to the company, which has had long-running battles with Nigerian authorities on a myriad of issues.

In August 2018, the Central Bank of Nigeria (CBN) demanded MTN repatriate $8.1 billion (R117 billion) to Nigeria, which the bank said the company had sent abroad in breach of foreign exchange regulations. MTN denied the allegations.

In December of the same year, MTN agreed to make an almost $53 million payment to resolve the dispute. At the time, it said MTN Nigeria and the CBN had agreed it would pay a notional reversal amount of $52.6 million, without admission of liability. This was for a 2008 private placement remittance worth around $1 billion that the CBN found was based on certificates that did not have final approval.

Almost three years ago, MTN agreed to pay more than $1 billion to settle a dispute over SIM cards in Nigeria. This was after the telco failed to meet a deadline to disconnect 5.1 million unregistered SIM cards on its Nigerian network.

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