Nigerian authorities withdraw $2 billion tax claim against MTN

Nigeria’s Attorney General has withdrawn a tax claim of $2 billion against MTN, as it hands the matter over to more relevant Nigerian authorities to handle the dispute.

On 4 September 2018, MTN announced that MTN Nigeria was disputing a claim for back taxes of approximately $2 billion by the Attorney General of the Federal Republic of Nigeria and Minister of Justice (AGF).

At the time of the claim, the Nigerian central bank said that MTN and other lenders “flagrantly violated foreign-exchange violations” in taking cash out of the country over eight years through 2015.

The Nigerian Attorney General 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 prior 10 years.

Subsequent to this, MTN Nigeria commenced legal action in Nigeria against the AGF, which court action was most recently postponed to 30 and 31 January 2020.

In a statement to shareholders on Friday (10 January), MTN noted that MTN Nigeria has been informed by means of a letter received by its legal counsel and dated 8 January 2020, that the claim was being withdrawn – and handed over to more relevant authorities.

“Following careful review and due consultation with relevant statutory agencies, the AGF has decided to refer the matter to the relevant authorities, being the Federal Inland Revenue Service and Nigeria Customs, with a view to them resolving the issues,” MTN said.

Accordingly, the AGF has withdrawn its letter of demand for the aforementioned $2 billion that was issued in August 2018.

“MTN Nigeria will consequently follow due court process to withdraw its legal action against the AGF and engage with FIRS and NC on this issue. MTN remains committed to building and maintaining cordial relationships with all regulatory authorities in Nigeria,” it said.

Commenting on the news, MTN Group CEO, Rob Shuter said: “We appreciate this decision of the Attorney General which paves the way to an orderly and amicable resolution of this matter. MTN remains fully committed to meeting our fiscal responsibilities and contributing to the social and economic development of Nigeria and all regions where we operate.”

Read: MTN realises R14 billion in asset sales in 2019

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Nigerian authorities withdraw $2 billion tax claim against MTN