Nigeria attorney general drops $2bn tax claim against MTN; next stop: tax authorities

MTN. (Duncan Alfreds, Fin24)
MTN. (Duncan Alfreds, Fin24)

MTN Nigeria is withdrawing its legal action against the Attorney General of the Federal Republic of Nigeria and the Minister of Justice (AGF), in a matter that saw the Nigerian authorities seeking to recover around $2bn in back taxes from the wireless carrier, MTN said on Friday.

The AGF has withdrawn its claim and MTN will now be dealing with Nigeria's tax authorities instead, according to a statement.

MTN Group CEO, Rob Shuter, praised the move, saying it was an opportunity to settle the matter amicably.

News broke in 2018 that the Nigerian authorities had not accepted the results of a self-assessment by MTN. At the time, MTN said it believed it had met its tax obligations.

According to MTN's statement on Friday, the company was advised by its lawyers this week that the AGF had withdrawn its claim and was referring the matter, instead, to the Federal Inland Revenue Service (FIRS) and Nigeria Customs (NC).

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

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

"MTN Nigeria has been informed by means of a letter received by its legal counsel and dated January 8, 2020, that, 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. Accordingly, the AGF has withdrawn its letter of demand for the aforementioned US$2 billion that was issued in August 2018."

MTN Nigeria would be following due court process to withdraw its legal action and engage instead with FIRS and NC, MTN said.

It said it was committed to "cordial relationships" with the country's regulatory authorities.

Shuter added: "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."

MTN's share price saw a significant uptick on Friday afternoon. By 5pm, shares were trading 5.3% up at R83.67 per share. 

* Compiled by Marelise van der Merwe

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