Nigeria backs down on MTN’s $2bn tax demand

Nigeria backs down on MTN’s $2bn tax demand

13 January 2020 | Alan Burkitt-Gray

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The Nigerian government has dropped its $2 billion tax demand against the local branch of South African operator MTN.

The move comes just two weeks before MTN Nigeria was due to start court action against Nigeria’s Attorney General and Minister of Justice.

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.”

The dispute started in 2018 when Abubakar Malami, Attorney General in the Nigerian Ministry of Justice since 2015, said MTN owed the equivalent of $2 billion in unpaid duties and taxes dating between 2007 and 2017. The MTN group denied the liability.

The Nigerian government said the decision to drop the demand followed “careful review and due consultation with relevant statutory agencies”. The Attorney General said he would refer the matter to Nigeria’s Federal Inland Revenue Service and the country’s customs, with a view to them resolving the issues.

The tax demand was only the latest in a series of disputes between Africa’s biggest mobile operator and the government of Nigeria. In August 2018 the Central Bank of Nigeria told MTN to repatriate $8.1 billion that it had taken out of the country with what it called “irregular capital importation certificates issued over the period 2007 to 2015”. That was settled in early 2019 for a nominal $53 million.

Four years ago the government tried to fine MTN the equivalent of $3.9 billion after claiming it was continuing service to customers with unregistered SIM cards. MTN was originally fined $5.2 billion in October 2015 for failing to disconnect the users. The Nigerian Communications Commission (NCC) later cut the fine by 25%.

Meanwhile, American Tower has reached an agreement for the acquisition of MTN’s 49% stakes in the company’s joint ventures in Ghana and Uganda.