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$1.3bn Withholding Tax Suit: AGF, MTN May Settle Out Of Court

The protracted legal battle between MTN Nigeria Communication Ltd, and the Attorney General of the Federation over alleged N242 billion and 1.3 billion dollars import duties and withholding tax assessments may have been resolved out of court.

MTN Nigeria revealed on Friday in a press statement signed by its Company Secretary, Uto Ukpanah, that the AGF had formally withdrawing his demand for the contentious alleged revenue indebtedness.

According to the telecommunications company, the AGF had decided to refer the matter to the Federal Inland Revenue Service (FIRS) and Nigeria Customs Service (NCS) with a view to resolving contentious issues.

The statement reads in part, “MTN Nigeria is pleased to report that its legal counsel has received a letter dated 8 January 2020 from the Attorney General of the Federation and Minister of Justice (the AGF) formally withdrawing his demand for N242,244,452,215.97 and USD$1,283,610,357.86 alleged revenue indebtedness.

“The letter confirmed that following careful review and due consultation with relevant statutory agencies, the AGF has decided to refer the matter to the Federal Inland Revenue Service (FIRS) and Nigeria Customs Service (NCS) with a view to resolving contentious issues.

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“MTN Nigeria will consequently follow due court process to withdraw its legal action against the AGF and engage with the FIRS and NC on the issues.

“MTN Nigeria remains committed to conducting its business in accordance with applicable laws in Nigeria.

“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.’’

MTN had gone before the Federal High Court in Lagos seeking the sum of N3 billion in damages against the federal government for what it described an illegality premised on a process which is malicious, unreasonable and made on incorrect legal basis.

The telecommunications company had argued that the AGF’s assessment of its import duties, withholding tax and value-added tax in the sums of N242 billion and 1.3 billion dollars was an legality.

MTN is seeking among other declaratory reliefs, a declaration that the AGF’s demand of the sums of N242 billion and 1.3 billion dollars from MTN, is premised on a process which is malicious, unreasonable and made on incorrect legal basis.

A Declaration that the purported “self assessment” exercise instituted by the AGF via its letter of May 10, is unknown to law, null and void and of no effect whatsoever.

In addition, the plaintiff wants a court order, vacating the AGF’s demand letter dated Aug. 20, for the sums of N242 billion and 1.3 billion dollars from MTN Nigeria Communications Ltd.

Meanwhile, in its preliminary objection, the AGF argues that the plaintiff in seeking redress to the subject matter, has just three months from the date the cause of action arose, to institute the action.

The respondent further argues that the plaintiff commenced the suit in clear disregard to Section 2 of the Public Officers Protection Act, which provides that any action commenced against a public officer, must be made within three months from commencement of cause of action.

The AGF had also submitted that plaintiff’s failure to commence the suit within three months as stipulated by law, robs the court of jurisdiction to entertain same.

The court has since dismissed the AGF’s preliminary objections.

The matter has been adjourned till January 31 for hearing by Justice Chukwujekwu Aneke.

30th November 2021
Nigerian Pantagraph
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