MTN wins early court victory in $2-billion Nigeria tax dispute

A Nigerian court has thrown out an objection lodged by Nigeria’s attorney-general, which is claiming US$2-billion in unpaid duties and taxes from MTN Group’s subsidiary in the West African country, paving the way for the substance of an MTN lawsuit against the AG to be argued next month.

The federal high court rejected the Notice of Preliminary Objection filed by the AG in response to MTN Nigeria’s lawsuit. The substance of MTN’s suit is now scheduled to be heard in court on 26 June, the telecommunications group said on Tuesday.

MTN Nigeria is seeking interlocutory relief (to stop the AG from taking measures such as freezing MTN Nigeria’s bank accounts) and to have the AG’s letter of demand declared invalid.

The group took legal action after receiving a demand notice last September from the AG alleging unpaid duties and taxes between 2007 and 2017.

The suit challenges the authority of the AG to deal with issues around tax and custom duties. “According to the law, oversight for this is the responsibility of the Federal Inland Revenue Service and Nigerian Customs Service,” MTN said.

The court heard arguments on the AG’s preliminary objection on 26 March 2019. At the time, the AG requested that MTN’s suit be dismissed because it was not filed within the appropriate time frame — within three months of receipt of the initial request for a self-assessment.

‘Fully compliant’

“Having considered the matter, the judge determined that MTN’s suit was not statute-barred, as the company was only required to file its case within three months of receipt of the actual demand notice, which it did,” MTN said.

The telecoms group said that even if the court ultimately finds that the AG’s office is within its rights to assess taxes and duties, “it does not imply that the assessment that has been made is legitimate”.

“MTN maintains that it is fully compliant with Nigerian tax laws,” it said.

The $2-billion in back taxes demanded by the AG is the last significant matter that MTN Nigeria needs to resolve with authorities there as it prepares to float its shares on the Nigerian Stock Exchange. The company previously agreed to settle a dispute over repatriated dividends with the Central Bank of Nigeria, agreeing in December 2018 to cough up $53-million after the Bank had ordered it to bring back $8.1-billion.  — (c) 2019 NewsCentral Media