$2bn Tax Arrears: MTN Kicks, Says FG’s Claim ‘Regrettable, Disconcerting’

African telecommunication giant, MTN, has reacted after the Nigerian government demanded a payment of $2 billion in tax arears.

According to a letter written to MTN by Nigeria’s Attorney General of the Federation, Abubakar Malami, the arrears cover import duties, VAT and withholding taxes on foreign imports/payments.

Malami said his office made a “high-level calculation” that MTN should have paid approximately $2 billion in taxes relating to the importation of foreign equipment and payments to foreign suppliers since 2008.

The development comes days after the Central Bank of Nigeria ordered MTN to pay $8.13 billion ‘illegally repatriated’ to South Africa.

The apex bank also fined four banks – Diamond Bank, Stanbic IBTC, Citi Bank and Standard Chartered Bank – involved in the process.

But in a statement released signed by the company’s public relations manager, Funsho Aina, on Tuesday, MTN described the development as “regrettable and disconcerting”.

The company refuted the claim by Malami, saying it has paid all its taxes and owes the Nigerian government nothing.

It further explained that multiple tax assessments have been satisfactorily carried out by relevant institutions in Nigeria, as regards the matter.

The statement reads: “Following the receipt of the letter from the Central Bank of Nigeria on foreign exchange repatriation, MTN Nigeria (“the Company”) has today provided an update on the company’s position on the issue. The company has also notified the market, and all stakeholders that it has received a notice from the Attorney General of Nigeria that he intends to recover up to US$ 2 billion of tax relating to, inter alia, import duties, VAT and withholding taxes on foreign imports/payments.

“MTN continues to strenuously deny the allegations being made by the Central Bank of Nigeria and has provided further clarity on the company’s position. MTN equally strenuously rejects the findings of the Attorney General’s investigation and believes it has fully settled all amounts owing under the taxes in question.

“It is both regrettable and disconcerting that despite the historic engagements with the Nigerian authorities by MTN Nigeria, the senate investigation into the CCI matter, and the multiple tax assessments done by the Nigerian tax authorities over many years that were satisfactorily concluded, that these matters are being reopened.”

In 2015, MTN Nigeria was fined N1.04 trillion ($5.2 billion) by the Nigerian Communications Commission, NCC, for failing to disconnect 5.1 million unregistered subscribers.

The fine was later reduced to N330 billion.