MTN Hit Hard as Court Upholds FIRS' Massive $87.9m Fines, Interests
- MTN Nigeria is under serious financial constraints as a Federal High Court has upheld $87.9 million fines against it
- This sum is the total of fines and penalties on Value Added Tax (VAT) liabilities imposed by the FIRS
- A Tax Appeal Tribunal (TAT) earlier granted FIRS the VAT liabilities of $71 million, discounting the fines and interests
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Legit.ng journalist Ruth Okwumbu-Imafidon has over a decade of experience in business reporting across digital and mainstream media.
A Federal High Court in Lagos state has upheld the $87.9 million penalties and interests that the Federal Inland Revenue Service (FIRS) imposed on MTN Nigeria Communications Plc.
The court upheld these fines while ruling on the appeal filed by the FIRS against the Tax Appeal Tribunal’s (TAT) decision of October 20, 2023.
The Tax Appeal Tribunal, in its judgment, failed to grant the penalties and interests of $87.9 million as requested by the FIRS, even though it awarded the principal sum of $71 million on MTN.
Source: UGC
FIRS, thus appealed to the Federal High Court in an appeal marked FHC/L/1A/2024, praying the TAT ruling be set aside, LEADERSHIP reports.
FIRS demands $87.9m in fines from MTN
FIRS in its appeal also requested the court to give an order permitting the appellant to pursue and claim all penalties and interest arising from the principal sum of $71 million awarded by the Tribunal in its judgment dated October 20, 2023.
The tax administrator also asked the Federal High Court to determine if the Tribunal was right to refuse to grant the Appellant (FIRS) the accumulating penalties and interest, even after determining that the goods and services purchased by the Respondent (MTN) were subject to value-added taxes.
FIRS also prayed the court to determine whether the Tribunal was right to apply the provisions of the Company Income Tax Act (CITA) to address issues related to the penalties and interest arising from the operations of the Value Added Tax (VAT) Act.
The court upholds the $87.9 million fines
In its response to the suit, MTN insisted that the TAT was right to have dismissed penalties and interests imposed on the principal VAT liabilities, in line with Sections 13(2) and (3) of the 5th Schedule to the FIRS Act.
They argued that the Appellant's points about these sections don't match what was written in the Notice of Appeal, so those arguments shouldn't be considered.
Sitting over the judgment, Justice Ayokunle Faji resolved the issues raised by the respondent and granted the appellant its three requests.
The judgment reads;
“The decision of the TAT contained from page 750 of the record to the effect that interest and penalty are not due to be paid by the respondent to the appellant is hereby set aside. This appeal, therefore, succeeds. I grant the three reliefs sought, as prayed.”
Recall that MTN and other TelCos recently threatened to cut off banks' USSD code services over owed sums, but stepped back on the decision after the banks paid up.
Elon Musk's Starlink poses new threat to MTN
In related news, Legit.ng reported that Starlink started beta-testing its direct-to-mobile service, in a move set to transform the global telecom industry.
This could spell serious competition for MTN Nigeria and others that have dominated the Nigerian market for decades.
From the skies, users can access broadband internet services and make phone calls, even in the most remote regions.
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Source: Legit.ng
