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MTN says Nigeria has withdrawn $2bn tax demand

Lagos, Nigeria | AFP |  Mobile giant MTN has said that Nigeria’s attorney general had withdrawn a demand for around $2 billion in back taxes in the latest step towards resolving its legal woes with the authorities.

The South African telecommunications firm has already battled back a string of financial claims from Nigeria and last May floated its shares on the stock exchange in the West African country.

The company said that the attorney general’s office had “withdrawn its letter of demand” for the back taxes and referred the matter to the inland revenue and customs services to be resolved.

“We appreciate this decision of the Attorney General which paves the way to an orderly and amicable resolution of this matter,” MTN Group CEO Rob Shuter said in a statement.

MTN, which began operation in Nigeria in 2001, is the country’s largest operator with some 60 million subscribers.

The company last year settled a $1.5 billion fine levelled by the authorities for failing to disconnect unregistered subsribers.

In 2018 it agreed to pay a separate $53 million fine after being accused of illegally repatriating $8.13 billion to South Africa.

The disputes with MTN have rattled investor confidence in Africa’s most populous nation and tarnished diplomatic relations between continental powerhouses Nigeria and South Africa.

FULL MTN STATEMENT

On 4 September 2018, MTN announced that MTN Nigeria Communications PLC (“MTN Nigeria”) was disputing a claim for back taxes of approximately USD2 billion by the Attorney General of the Federal Republic of Nigeria and Minister of Justice (the “AGF”). Subsequent to this, MTN Nigeria commenced legal action in Nigeria against the AGF, which court action was most recently postponed to 30 January 2020.

MTN Nigeria has been informed by means of a letter received by its legal counsel and dated 8 January 2020, that following careful review and due consultation with relevant statutory agencies, the AGF has decided to refer the matter to the relevant authorities, being the Federal Inland Revenue Service (“FIRS”) and Nigeria Customs (“NC”), with a view to them resolving the issues. Accordingly, the AGF has withdrawn its letter of demand for the aforementioned USD2 billion that was issued in August 2018.

MTN Nigeria will consequently follow due court process to withdraw its legal action against the AGF and engage with FIRS and NC on this issue. MTN remains committed to building and maintaining cordial relationships with all regulatory authorities in Nigeria. Commenting on the news, MTN Group CEO, Rob Shuter said “we appreciate this decision of the Attorney General which paves the way to an orderly and amicable resolution of this matter.  MTN remains fully committed to meeting our fiscal responsibilities and contributing to the social and economic development of Nigeria and all regions where we operate.”

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