Rob Shuter, chief executive officer of MTN Group, says the Nigerian tax authorities do not have any problem with the company despite the demand for $2 billion tax arrears Abubakar Malami, attorney-general of the federation (AGF).
Shuter spoke at a conference call where MTN’s 2018 annual results were presented to executives and stakeholders of the company.
In September 2018, Malami had written to MTN Nigeria, demanding a payment of $2 billion in tax arrears.
He broke the amount down to a 10-year period for import duties, value added tax (VAT) and withholding taxes on foreign imports/payments.
MTN Nigeria had denied any wrongdoing, saying it had fully settled all outstanding taxes. The telco also sued the AGF.
Reiterating the company’s stance, Shuter described the legal process as “odd,” adding that the attorney-general had no right to collect tax on behalf of government.
He said MTN is a responsible company whose tax assessments sre in line with the requirements of the relevant authorities.
“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,” the transcript read.
“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.”
Commenting on the issue, Ralph Mupita, MTN’s chief financial officer said: “The audit committees of both Nigeria and 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, 2018, has been adjourned to March 26.