MTN Nigeria has recruited KPMG as the tax dispute between the telecommunications company and the Federal Inland Revenue Service drags on. The network provider had previously asked a tax tribunal to interpret the decision to pay corporate tax on the N330 billion fine for SIM infraction.
MTN Nigeria engaged the services of KPMG because of the audit and tax company’s experience with the Nigerian terrain. According to a report, the knowledge of KPMG about Nigerian tax matters will come in handy as the network provider seeks to avoid the tax demanded by the FIRS.
Nairametrics had reported that MTN Nigeria was in a fresh imbroglio for deducting tax from the N330 billion it paid to the Nigerian Communications Commission (NCC) for SIM card infraction. NCC had initially fined the largest network operator in Nigeria N1.04 trillion for deactivation of more than five million unregistered SIM cards in 2015. The Commission later reduced the fine after much negotiation. The reduction was, however, on the condition that MTN Nigeria would list on the Nigerian Stock Exchange (NSE).
On May 31, 2019, MTN Nigeria concluded payment of the N330 billion fine and also listed on the country’s bourse on May 16 in fulfilment of the agreement.
But the FIRS queried the firm for deducting tax from the N330 billion fine it paid NCC. According to FIRS Chief, Babatunde Fowler, MTN does not have the right to deduct tax from the money paid to the NCC. He insisted that fines and penalties for regulatory infractions are revenues paid to the Federal Government and should not be subjected to any tax deduction.
It was learnt that the Nigerian Tax Tribunal is also involved in the tax dispute, probing if the fine paid by the company to the government should be subjected to tax. The tribunal has been on the case for about one year.
Meanwhile, the tax dispute is in an escrow account pending the ruling of the tribunal, the report disclosed.
MTN Nigeria said it had gone ahead to request a judicial review of the Nigerian tax authority.
“We believe that the fine should be treated as part of the cost of running the business but the FIRS thinks otherwise.
“We’ve paid everything to the FIRS then we went to the tribunal and because the case is with the tax tribunal the government can’t access the money.”