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$1.3 Billion Tax Claim: Nigeria’s Attorney General Withdraws Demand

Nigeria’s Attorney General of the Federation (AGF) and Minister of Justice, Abubakar Malami, has withdrawn a demand of N242 billion and $1.3 billion tax claim against leading Information and Communications Technology (ICT) company, MTN Nigeria Plc.

In a letter dated January 8, 2020 and sent to counsel to MTN formally withdrawing the demand, the AGF confirmed that after careful review and due consultation with relevant statutory agencies, it was referring the matter to the Federal Inland Revenue Service (FIRS) and Nigeria Customs Service (NCS), with a view to resolving contentious issues.

The AGF had in May 2018 claimed that it carried out a tax assessment and found MTN in breach of evading import duties and withholding tax and value-added tax to the tune of N242 billion and $1.3 billion. MTN repeatedly denied the accusation, and on September 10 of the same year, instituted a suit challenging the legality of the AGF’s assessment.

Among other things, MTN had sought that the court declare the AGF’s action a violation of section 36 of the Constitution, and that the AGF acted in excess of its powers and illegally by usurping the powers of the FIRS. The company also asked that it be awarded N3 billion in damages, to cover general damages, exemplary damages, and legal costs.

Reacting to the AGF’s withdrawal, MTN reiterated its commitment to always abide by the law, pledged to keep conducting its business in accordance with applicable laws in Nigeria, and said it would consequently follow due court process to withdraw its legal action filed against the AGF, and thereafter engage with the FIRS and NCS on the issues.

Expressing satisfaction at the development, MTN Nigeria CEO, Ferdi Moolman said, “We are very pleased with the decision of the AGF and we commend him for his wisdom. We maintain our dedication to building and maintaining cordial relationships with all regulatory authorities in Nigeria and remain fully committed to meeting our fiscal responsibilities and contributing to the social and economic development of Nigeria.”

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