Tribunal Orders MTN To Pay $72.5m | READ WHY

However, the Tribunal absolved the telecommunication firm from paying the sum of $21,039,807 as penalties and interest on the principal sum.

A five-person panel led by Professor A. B. Hamed gave the verdict and order recently while delivering judgment in an appeal numbered TAT/LZ/VAT/075, filed by the telecommunication company against the request by the FIRS to pay the default.

According to the processes filed before the appeal, the facts were that sometime on May 10, 2018, the Office of the Attorney General of the Federation issued a report of its investigation into the MTN's Forms A and M transactions. The report covered the 2007 to 2017 accounting years.

But, in a revised report dated August 20, 2018, the OAGF adjusted the alleged outstanding in respect of import duty and VAT to the tune of N242.2 billion (Form M -visible transactions), whilst the section relating to VAT and Withholding tax (WHT) was revised $1.284 billion (Form A invisible transactions).

In July 2021, the FIRS issued a VAT assessment of $93, 590, 366 million to the MTN. This assessment comprised $72,551,059 million as the principal liability and $21,039,807 million for penalties and interest on the principal sum (first assessment).

MTN objected to the first assessment, after which the FIRS further reviewed the evaluation.

Accordingly, by the Notice of Assessment dated April 14, 2022, the Respondent issued a revised assessment for US $135,697,755m to MTN as a revised assessment.

Although the principal amount of tax alleged to be outstanding and due from the Appellant (principal tax liability) in the revised assessment, i.e. $47, 776, 210 million, was less than the alleged principal tax liability contained in the first assessment, i.e., $72,551,059 million, the interest and penalty imposed by the FIRS on the alleged principal tax liability in the revised assessment, i.e. $87.900 million, is higher than the interest and penalty imposed by the FIRS on the alleged principal tax liability in the first assessment, i.e., US $21, 039,807 million.

Also, by a letter of notice of objection dated May 13, 2022, MTN objected to the FIRS's revised assessment, and FIRS, by a letter dated June 16, with ref. No. FIRS/TID/LOS/2020/0213/01 notified the MTN of its refusal to amend the revised assessment.

The Tribunal, following a consideration of all the processes filed by parties and citing a plethora of authorities, held that: "In the final analysis, it is the decision of the Tribunal that issues one to four discussed above are all resolved in favour of the Respondent, and the Appellant is therefore ordered to settle the assessed liabilities accordingly.

"However, issue five concerning penalty and interest is resolved in favour of the Appellant and is therefore set aside by this Honourable Tribunal. This is our Judgement.ÔÇØ

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