MTN Nigeria Communications Plc said it would appeal the decision of the Tax Appeal Tribunal (TAT) to pay a $47.8 million tax obligation to the Nigerian government.

The telecoms operator disclosed this in a statement, signed by its company secretary, Uto Ukpanah, on Monday, October 30.

The Tribunal had, in its ruling on Friday, October 20, 2023, directed MTN Nigeria to pay a principal liability of $47.8 million tax bill after it set aside an interest and penalty charge of $87.9 million.

Insisting on appealing the judgment, the telecoms giant said, “Having reviewed this outcome and considering input from our tax and legal consultants, MTN Nigeria has resolved to appeal the decision of the tribunal.”

The TAT decision pertains to the value-added tax (VAT) assessment for 2007 and 2010-2017, as issued by the Federal Inland Revenue Service (FIRS) to the company.

In September 2018, the then Attorney General of the Federal and Minister of Justice (AGF), Abubakar Malami, handed a $2 billion tax bill to MTN Nigeria related to imports of foreign equipment and payments to foreign suppliers, The ICIR reported.

The AGF’s demand came a few days after the Central Bank of Nigeria (CBN) ordered MTN Nigeria to hand over $8.1 billion the apex bank said the company illegally took out of the country.

MTN Nigeria then headed to court to challenge the tax bill, one of the company’s series of disputes, The ICIR reported here.

In 2020, the AGF withdrew from the case and transferred the Form-A-related transactions valued at $1.3 billion to the FIRS and the balance to the Nigeria Customs Service (NCS) to resolve the issue.

According to the telecoms company, after a series of engagements, the FIRS issued an initial assessment of $93.6 million, comprising $72.6 million as principal liability and $21 million for penalties and interest on the principal amount.

In subsequent engagements, MTN Nigeria said the tax regulator had to issue a reversed total assessment of $135.7 million, representing a principal tax liability of $47.8 million and interest and penalty of $87.9 million.

“To clarify the interpretation of the VAT Act’s provision concerning the tax treatment of the transactions that led to the aforementioned assessments, MTN Nigeria filed an appeal at the TAT.

“The transactions in question primarily involve the alleged VAT payable on offshore training services provided to employees of the company, transponder services provided by a non-resident company, and software licencing and upgrades,” the company added.

In August 2001, MTN Nigeria began operations in the Africa’s most populous country after it got a mobile phone licence to operate.

The ICIR can report that Nigeria accounts for a third of MTN’s annual core profit and is the company’s biggest market.