Court Upholds $87.9 Million Penalties, Interests Against MTN Nigeria
The Federal High Court in Lagos has upheld the sum of $87.9 million in penalties and interests imposed on MTN Nigeria Communications Plc by the Federal Inland Revenue Service (FIRS), overturning an earlier ruling by the Tax Appeal Tribunal (TAT).
Presiding over the case, Justice Ayokunle Faji delivered the ruling in favour of FIRS, setting aside the tribunal’s decision of 20th October 2023, which had awarded only the principal sum of $71 million but declined to approve penalties and interest.
Dissatisfied with the TAT’s verdict, FIRS, represented by its legal team led by Bolanle Oniyangi, with Moses Ideho and Olufemi Asekun, filed an appeal marked FHC/L/1A/2024.
The revenue agency sought the court’s approval to demand all penalties and interests accrued on the principal sum.
In its appeal, FIRS requested two key orders:
Setting aside the TAT decision of 20th October 2023.
Directing MTN Nigeria to pay all penalties and interest arising from the assessed value-added tax (VAT) liability.
The tax agency’s lawyers argued that the tribunal had erred in refusing to grant these additional charges, despite confirming that the goods and services purchased by MTN were subject to VAT.
They also contended that the tribunal wrongly applied the Company Income Tax Act (CITA) in discharging the penalties and interest instead of adhering to the Value Added Tax Act.
MTN Nigeria, represented by lawyers Agada S. Agada and P. Baiyere, opposed the appeal.
In its Brief of Argument, filed on 19th April 2024, MTN raised a sole issue for determination—whether the tribunal was wrong to set aside the penalties and interest imposed by FIRS.
The telecom giant maintained that the TAT correctly interpreted Section 13(2) & (3) of the 5th Schedule to the FIRS Act in ruling in its favour.
MTN’s counsel further argued that FIRS’ reliance on these provisions was not supported by the Notice of Appeal, rendering their argument ineffective.
In response, FIRS filed a reply on 8th May 2024, reiterating that its arguments were firmly based on ground two of the Notice of Appeal.
The revenue agency insisted that its reliance on Section 13(2) & (3) of the FIRS Act, as well as other relevant statutory provisions, was valid and properly presented before the court.
Delivering judgment on 24th January 2025, Justice Ayokunle Faji ruled in favour of FIRS, dismissing MTN’s counterarguments.
The judge resolved all issues against the telecom company and held that the tribunal’s decision to exclude penalties and interest was flawed.
“I must therefore resolve the sole issue against the respondent. I therefore find merit in this appeal,” Justice Faji declared.
He further ruled: “The decision of the TAT contained from page 750 of the record to the effect that interest and penalty are not due to be paid by the respondent to the appellant is hereby set aside.
This appeal therefore succeeds. I grant the three reliefs sought, as prayed.”
With this ruling, MTN Nigeria is now liable for the full $87.9 million in taxes, penalties, and interest as demanded by the FIRS.
The judgment marks a significant victory for the Nigerian tax authority in its ongoing enforcement of tax compliance within the corporate sector.
