Rob Shuter, MTN Group CEO claims Attorney General of Nigeria is “playing games” with a $10 billion tax evasion allegations made against MTN Nigeria, owned by the South African mobile phone group.
Abubakar Malami, Attorney-General of the Federation of Nigeria and Minister of Justice, last year accused MTN of alleged tax evasion totalling over $2 billion, after the Central Bank of Nigeria asked the mobile phone company to refund over $8 billion said to have been paid investors without regulatory clearance by the apex bank.
The MTN Group CEO says the mobile phone company, which is challenging the tax evasion allegations in court, is ready for a showdown with the Nigerian chief law officer because Malami is “really not mandated to collect tax.”
Abubakar Malami, Attorney General of the Federation, and Minister of Justice, (left) with President Muhammad Buhari.
Last year’s tax evasion row is another major jolt for MTN Nigeria, the largest mobile phone company in the country by subscriber base which was slammed with an unprecedented $5.2 billion (that was later reduced to $3.2 billion) over for failing to disconnect 5.2 million unregistered subscribers on its network, as exclusively reported by Technology Times.
The MTN Group CEO says the mobile phone company, which is challenging the tax evasion allegations in court, is ready for a showdown with the Nigerian chief law officer because Malami is “really not mandated to collect tax.”
“Look, I think if you look at our history for complicated tax disputes, they can take years, because you end up going through this tribunal, that tribunal etc. Now, of course what’s odd about the Nigeria situation is it’s not the Commissioner for Inland Revenue that we have the dispute with. It’s the Attorney General, who is really not mandated to collect tax. So, the legal process is basically saying you’re playing a game that you’re not meant to be playing”, Shuter says on Thursday while answering questions at the MTN 2018 results conference in South Africa.
In the wake of the Nigeria tax evasion row, MTN Nigeria last year filed a lawsuit at the Federal High Court asking the court to restrain the CBN and the AGF from taking further action in respect of their orders asking the mobile phone company to refund a total of $10.134 in taxes allegedly in the country.
Shuter, who remains “absolutely adamant” that MTN acted responsibly in the alleged tax evasion matter says with the case against the Nigerian AGF, the company is ready to “stare this one down.”
Shuter says that MTN’s tax issues in Nigeria represents some of the mobile phone group’s difficult stakeholder situations also encountered in some of its mobile phone units in countries like Benin and Cameroon.
“Of course, during the year, we faced a number of new challenges, the most material of which was the Central Bank of Nigeria dispute on historical dividend repatriations. This was resolved and we announced in December that we had agreed to implement a notional reversal of the 2008 private placement and consequently made a resolution payment of $53 million. So clearly, for 2019 we will need to put more work into our remaining issue with the Attorney General in Nigeria as well as a very difficult situation in Uganda with the licence extension and some other ancillary matters”, according to the MTN Group CEO.
Shuter, who remains “absolutely adamant” that MTN acted responsibly in the alleged tax evasion matter says with the case against the Nigerian AGF, the company is ready to “stare this one down.”
According to him, “when we talk to the tax authorities, they have no particular quarrel with where we are with our various assessments. So, either we get the thing chucked out early on and the issue is finished, or it is just one of these lingering things that rolls around in the system for a while.
“And personally, I don’t know which way it’s going to play out. I’m just absolutely adamant that we’re a responsible company, we have paid the taxes we had to pay, and the tax authorities themselves aren’t saying that we owe them anything. So, I think we’ve just got to stare this one down.”
MTN Nigeria last year said it sued the CBN and AGF at the Federal High Court of Nigeria to protect the mobile phone company’s assets and shareholders.
Tobe Okigbo, MTN Nigeria Corporate Relations Executive said that “the allegations being made involve issues that appear to be complex and so are easily misunderstood and misinterpreted. They are made even more confusing when the relevant authorities send conflicting messages and instructions and act in a way that appears un-coordinated and at cross purposes.”
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