MTN seeks tax tribunal ruling over disagreement with FIRS

MTN Nigeria has sought the judgment of a tax tribunal over variance with the Federal Inland Revenue Service ( FIRS) on tax deductions from a fine imposed by the Nigerian Communications Commission (NCC) in 2015.

An N1.04 trillion fine was slammed on MTN four years ago for failure to deactivate all unregistered lines within the period stipulated by the NCC.

The fine was later reduced by 25 percent, then to N330 billion based on an agreement with the telecom regulator, which saw MTN list on the Nigeria Stock Exchange in May this year.

While the sixth and final instalment of the fine was settled in May, the federal tax authority has queried the treatment of the fine by MTN as part of the cost of running its business, hence tax-deductible.

In a statement sent to the exchange on Friday, the telco acknowledged the “technical disagreement” with the FIRS and said it was seeking the ruling of tax tribunal on the matter.

“However, while the monies have been paid to FIRS, we have taken the disagreement to the Tax Tribunal set up by FIRS chairman and Minister of Finance, and are awaiting a decision,” the company said.

The FIRS had said MTN’S treatment of the fine, as a tax- deductible item was wrong.

“One cannot be given a penalty or fine, which is a punitive measure, and the company is saying it is tax-deductible so that it will get a tax credit on that,” Tunde Fowler, chairman, FIRS, said.

“Initially they ( MTN) made the payment on account. The FIRS said, no, it is not on account, but it is tax due to government,” Fowler said.