The Tax Appeal Tribunal, Lagos division has ordered MTN Nigeria Communications to pay the sum of $72, 551, 059, million to the Federal Inland Revenue Services.
According to Punch Newspapers,The fine is in tax default for 2007 to 2017.
MTN had approached the tribunal in an appeal over FIRS request for it to pay tax default.
Background
The FIRS had In July 2021 issued a VAT assessment of $93, 590, 366m to the MTN which was made up of $72, 551, 059 million principal liability and $21,039,807 million penalties and interest on the principal sum.
In response, MTN Objected to FIRS assessment which led to a review of the first assessment.
FIRS then issued a revised assessment of $135,697,755 million which was made of $47, 776, 210 million, principal tax liability and . $87.900m, interest and penalty.
In a letter dated May 13, 2022, MTN again objected to the revised assessment by FIRS.
However, in a letter dated June 16, FIRS refused to amend the revised assessment.
Consequently, MTN approached the Tax Appeal Tribunal and filled an appeal.
FIRS prayed the tribunal to dismiss MTN’s appeal, and determine the issues raised in its favour.
MTN prayed the panel to determine the issues in its favour
In the appeal five issues were set before the tribunal to determine.
Issues for determination
- “Whether in the absence of the production of any false or untrue document or statement by the Appellant, the Respondent has authority to conduct a tax investigation beyond the 5-year restriction.
- “Whether training provided by offshore facilitators outside of Nigeria is liable to VAT in Nigeria.
- “Whether the Respondent acted in error when it calculated and imposed interest and penalty on the Appellant’s alleged non-remittance of VAT liabilities, the said liabilities having not become final and conclusive.”
- “Whether in view of the clear and unequivocal provisions of the VAT Act prior to the amendment by the Finance Acts, the provision of software licensing and upgrades qualified as a taxable supply of goods and services.
- “Whether the provision/lease of bandwidth capacities by Intelsat Global Services & Marketing Ltd, a non-resident entity, through transponders located in the satellite, qualifies as a taxable supply of goods and services.
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Court’s decision
A five-man panel led by Professor A. B. Hamed delivered judgement on October 20.
While the panel resolved issue five in favor of MTN, issue 1 to four was resolved in favor of FIRS.
The panel ordered MTN to pay FIRS the sum of $72, 551, 059, million as quoted in the first assessment being principal tax liability.
However, the panel absolved MTN of the $21,039,807, demanded by FIRS as penalties and interest on the principal sum.
The panel said “In the final analysis, it is the decision of the Tribunal that issues one to four discussed above are all resolved in favour of the Respondent and the appellant is therefore ordered to settle the assessed liabilities accordingly.
“However, issue five in relation to penalty and interest is resolved in favour of the Appellant and is therefore set aside by this Honourable Tribunal. This is our Judgement.”
