Tax Default: Tribunal Orders MTN to Pay $72.55m Fine to FIRS
The Lagos state division of Tax Appeal Tribunal has ordered MTN Nigeria Communications to pay a total sum of $72, 551, 059 fine for its tax default to the Federal Inland Revenue Services. The fine covers 2007 to 2017.
However, the Tribunal absolved the telecommunication firm from paying the sum of $21,039,807, as penalties and interest on the principal sum. Upon reviewing all the processes filed by the parties, the tribunal distilled five issues for determination, which were; “Whether in view of the clear and unequivocal provisions of the VAT Act before 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.
“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.”
While counsel to MTN urged the tribunal to determine the issues in its favour, FIRS counsel, who includes: Abu Ocheme Director Legal FIRS, Egodi Adedeji and Moses Ideho, urged the court to dismiss the MTN’s appeal, and determine the issues raised in FIRS’s favour.
The tribunal, after taking arguments on the parties, resolved issues one to four in favour of the FIRS, and issue five was resolved in favour of MTN.
The tribunal after perusing all the processes filed by parties, and citing a plethora of authorities held that: “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.” #Tax Default: Tribunal Orders MTN to Pay US$72.55m Fine to FIRS Nigeria Eurobond Slumps after CBN Resumes OMO Auction