This is coming days after the FIRS chairman, Babatunde Fowler, accused the Nigerian subsidiary of the South African telco of deducting tax from the N330 billion fine imposed by the Nigerian Communications Commission.
Fowler maintained that fines and penalties for regulatory infractions were revenues paid to the Federal Government and should not be subjected to any tax deduction.
Argument: Babatunde Fowler says fine and sanctions are not tax-deductible
In an interview with Premium Times, Fowler queried why MTN Nigeria considered fine and penalty as tax-deductible. He said FIRS’ position was that MTN cannot remove tax from the fine imposed on it by the federal government.
“The alternative is for MTN to go to court and let the court (maybe Supreme Court) say the FIRS was wrong, and that such fines or penalties are tax-deductible,” the online platform quoted Fowler as saying.
MTN Nigeria’s position on tax deductions from fines
MTN Nigeria in a corporate filing on Monday, August 4, acknowledged that there is a technical disagreement between it and the Federal Inland Revenue Service (FIRS) as to how the fine should be treated for tax purposes.
Uto Ukpanah, MTN Nigeria secretary, said the company remains fully complaints with Nigerian tax laws and will abide by the findings of the tribunal on the matter.
“We acknowledge that there is a technical disagreement between MTN and the Federal Inland Revenue Service (FIRS) as to how the fine should be treated for tax purposes.
“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.
“MTN remains fully compliant with Nigerian tax laws and will abide by the findings of the tribunal. The company is committed to meeting its fiscal responsibilities and contributing to the social and economic development of Nigeria.”
The telecom firm said it has paid more than N1.7 trillion in taxes, levies, and fines to the government since 2001.
What caused disagreement
In 2015, MTN Nigeria incurred a record $5.2 billion fine over their failure to deactivate 5 million unregistered SIM cards. The fine was reduced to $1 billion (N330 billion) after a series of negotiations over the three years on the terms that MTN enlists on the Nigerian Stock Exchange (NSE).
The telecom firm completed its payment in the first quarter of 2019 and listed on the Nigerian Stock Exchange.
It is still facing tax dispute with the office of Nigeria's attorney-general billion in over taxes relating to the importation of foreign equipment and payments to foreign suppliers since 2008. The matter is still in a Nigerian court.