Federal Government Fines MTN $2 Billion Tax Penalty

The Federal Government has insisted that the telecommunications company, MTN, must pay the $2 billion tax penalty that the Federal Attorney General’s office has slammed on it.

According to Bloomberg, at yesterday’s hearing of the case, government lawyer Tijani Gazali prayed to the Lagos High Court to reject the application of the Johannesburg-based firm to stop it from paying backdated taxes.

MTN’s counsel, Wole Olanipekun, said the Federation’s Attorney General and Justice Minister Abubakar Malami, who imposed the penalty, lacked the authority to do so.

The firm had previously denied it did not pay taxes properly in the West African nation. The case was adjourned until May 7.

Meanwhile, the matter resulted in MTN shares falling as much a 6.8 per cent, the most since October 5 before paring losses to 0.1 per cent by the close in Johannesburg.

The share price has fallen 16 per cent since it was hit by a double Nigerian penalty in mid-2018.

The Central Bank of Nigeria first ordered it to transfer $8.1 billion of repatriated dividends back to the country before Malami announced the measure on taxes.

The company settled the former dispute in December, agreeing to send back $53 million and clearing itself of any wrongdoing.