MTN chief faults AGF on $2b tax demand | Nairalaw

MTN Group Chief Executive Officer (CEO) Rob Shuter yesterday
faulted the demand for $2 billion cash by the Office of the
Attorney-General of the Federation (OAGF).

It accused AGF Abubakar Malami, of “playing games” over the
demand for the cash, which the government said was in tax arrears
from the telecoms giant.

Shuter spoke at a conference call where MTN’s 2018 annual
results were presented to the country’s executives and
stakeholders.

Malami had last September written to MTN Nigeria, demanding the
payment of $2 billion in tax arrears.

He broke the cash down to a 10-year period for import duties,
Value Added Tax (VAT) and withholding taxes on foreign
imports/payments.

MTN Nigeria had rejected the allegation, insisting that it had
fully settled all outstanding taxes.

The telco also sued the AGF.

Reiterating the telco’s stance, Shuter described the legal
process as “odd,” adding that the AGF had no right to collect tax
on behalf of the Federal Government.

He said MTN is a responsible firm which tax assessments are in
line with the requirements of the relevant authorities.

The transcript of the conference call reads: “I think if you
look at our history for complicated tax disputes they can take
years, because you end up going through this tribunal, that
tribunal etc.

“Now, of course what’s odd about the Nigeria situation is it’s
not the Commissioner for Inland Revenue that we have the dispute
with. It’s the attorney-general, who is really not mandated to
collect tax.

“So, the legal process is basically saying you’re playing a game
that you’re not meant to be playing. And when we talk to the tax
authorities they have no particular quarrel with where we are with
our various assessments.

“So, either we get the thing chucked out early on and the issue
is finished, or it is just one of these lingering things that rolls
around in the system for a while. And personally I don’t know which
way it’s going to play out.

“I’m just absolutely adamant that we’re a responsible company,
we have paid the taxes we had to pay, and the tax authorities
themselves aren’t saying that we owe them anything. So I think
we’ve just got to stare this one down.”

Also commenting on the issue, the telco’s Chief Financial
Officer, Ralph Mupita, said the telco has thoroughly double-checked
its books without finding any remote exposure.

He said: “The audit committees of both Nigeria and (the) group,
as you can well imagine, have gone through this very thoroughly in
terms of all our tax exposures. And it’s the second time we’ve
looked at this.

“We looked at it at the half year when it was then a tax
assessment before the letters came in August.

“But we still believe there isn’t even a remote exposure that we
would put in contingent liabilities. But I think it’s important to
re-emphasise the point Rob raised.

“In the course of having any tax disputes with the authorities
these things can take years. So if this thing rolls on it’s no
different from a transfer pricing matter you may have a dispute
with an authority in country x, y, z.”

The hearing of the suit against the AGF first scheduled for
November 8 last year has been adjourned to March 26.