Despite last week’s heavy sanction in which South African telecoms giant, MTN Group, was ordered to refund a whopping $8 billion to the Central Bank of Nigeria for illegal dividend repatriations, the Federal Government on Tuesday worsened its woes with a fresh $2 billion tax demand.
The new tax bill was said to have been incurred by the telecom firm over the last decade.
But in its response Tuesday MTN regretted that the government still went ahead to make the tax claims despite ongoing talks with Nigeria’s Attorney General Abubakar Malami over concerns around tax compliance.
The company in a statement said it was billed for importation of foreign equipment and payments to foreign suppliers, all spread across a period of about 10 years.
“In this process, his (the Attorney General’s) office made a high-level calculation that MTN Nigeria should have paid approximately $2 billion in taxes relating to the importation of foreign equipment and payments to foreign suppliers over the last 10 years,” MTN said.
The firm added, however, that its total payment of around $700 million over the 10-year period fully settled the amount owed under the taxes in question.
Meanwhile agency report Tuesday indicated that shares in the telecom firm dropped 5.6 percent to 81.95 rand as at noon, bringing losses since last week to nearly 25 percent.
Last Thursday, the telecom firm was issued $8.1 billion demand over illegal fund repatriation involving Stanbic IBTC bank, Citibank, Standard Chartered Bank and Diamond all of which were made to pay about N5.87 billion fine.
The latest demands come two years after MTN agreed to pay more than $1 billion to end a dispute with Nigerian Communications Commission over unregistered SIM cards.
MTN, in its reaction, described the latest demands by Nigerian authorities as “regrettable and disconcerting.” The company said it will “continue to engage with the relevant authorities on all these matters, and we remain resolute that MTN Nigeria has not committed any offences and will vigorously defend its position.”
The Attorney General notified MTN that his office made a high-level calculation that MTN Nigeria should have paid approximately $2 billion in taxes relating to the importation of foreign equipment and payments to foreign suppliers over the last 10 years, a statement signed by the Public Relations Manager, MTN Nigeria Limited, Funso Aina, stated.
However, MTN has refuted the Federal Government’s claim of $2 billion tax arrears, saying an initial assessment of the full period indicated that total payments made to the tax authorities in regard to these foreign imports and payments aggregated to $700 million, insisting it had settled all taxes under scrutiny.
Speaking on the Attorney General’s demand notice for historical tax obligations, MTN Corporate Relations Executive, Tobe Okigbo, said, “MTN has conducted a detailed review of these claims and provided evidence of tax remittance to the Attorney General’s office. The Attorney General’s notice indicates that he is rejecting this evidence.
