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Court Affirms $87.9m Fines, Interest Imposed On MTN By FIRS

Jerry Emmason by Jerry Emmason
2 years ago
in Business
MTN nigeria
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Justice Ayokunle Faji of the Federal High Court in Lagos has upheld the penalties and interest amounting to $87.9 million imposed on MTN Nigeria Communication Plc by the Federal Inland Revenue Service (FIRS).

The court gave the verdict while delivering judgment in an appeal filed by FIRS against the Tax Appeal Tribunal’s (TAT) decision of October 20, 2023.

LEADERSHIP recalls that the Tax Appeal Tribunal had awarded a principal sum of $71 million on MTN but did not grant the penalties and interest that FIRS had requested.

But dissatisfied with the TAT’s ruling, FIRS had approached the Federal High Court in an appeal marked FHC/L/1A/2024, urging the court to set aside the decision of the Tax Appeal Tribunal.

FIRS specifically prayed the court for an order setting aside the decision of TAT and an order directing the Appellant to pursue all penalties and interest arising from the principal sum awarded by the Tribunal in its judgment dated October 20, 2023.

In its brief of argument, FIRS posed two key issues for determination before the court, asking whether the Tribunal was correct in refusing to grant the Appellant the accumulating penalties and interest after determining that the goods and services purchased by the Respondent were subject to value-added taxes.

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The tax agency also asked the court to determine whether the Tribunal was right to apply the provisions of the Company Income Tax Act (CITA) to address assessments related to the penalties and interest arising from the operations of the Value Added Tax Act,

In response, MTN raised one main issue for determination on whether the Tribunal erred in law by setting aside the penalties and interest imposed by the FIRS on the Respondent’s principal value-added tax liability.

MTN also contended that the Tribunal correctly dismissed the penalties and interest imposed on its alleged principal VAT liability and that the Tribunal accurately interpreted Sections 13(2) and (3) of the 5th Schedule to the FIRS Act.

They further asserted that the Appellant’s arguments regarding the applicability of these sections do not align with the Notice of Appeal and are, therefore, ineffective.

In his judgment, Justice Faji resolved all the issues canvassed by the parties against MTN Nigeria Communication Plc.

He held, “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,” the judge held.

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