MTN Nigeria’s court case over unpaid taxes to continue
Court ruling allows MTN to argue its case in June
MTN won a small victory on Tuesday when a Nigerian court ruled in its favour in its legal saga over an alleged unpaid $2bn tax bill.
The federal high court ruled that MTN met a deadline to respond to the demand from Nigeria’s attorney-general despite state lawyers saying that the company had failed to do so.
The attorney-general slapped MTN with the bill for backdated taxes in September but the company argued that the claim is without merit and was outside the authority’s jurisdiction.
According to the law, oversight for the tax and custom duties is the responsibility of the Nigerian inland revenue service and customs service, said MTN.
MTN said the case is scheduled to be heard on June 26.
Meanwhile, MTN Nigeria said on Tuesday that it had registered to list 20.4-billion ordinary shares at 0.02 naira each with the country’s securities regulator. It said it had started negotiations with the stock exchange to complete the listing. It agreed to the listing as part of an earlier fine for failing to disconnect unregistered SIM cards in the west African state.
In April, MTN Nigeria announced it had changed its status from a private company to being a public liability company as it prepares to list on that country’s bourse.
The conversion is a legal requirement in the preparatory process for MTN Nigeria’s listing.
Nigeria is the largest market for the Johannesburg-based operator and accounts for a third of its annual core profit. However, MTN has had multiple run-ins with Nigerian authorities over a number of issues in recent years, the most recent of which is the tax issue.
The company reached a settlement with Nigeria’s central bank in late December when the $8.1bn claim was reduced to $53m. The company maintains that its tax affairs are up to date and has not made any provision for extra taxes.
Last week, MTN announced its advisory board which includes Ghana’s former president John Kufuor and former SA president Thabo Mbeki.
Mish-al Emeran, an equity analyst at Electus, said the advisory board will likely help MTN to better navigate the regulatory environment in its different markets.