Fireworks
continued today as MTN Nigeria and the Attorney General of the Federation and
Minister for Justice continued their legal battle over the appropriateness of
the latter’s demand for $2 billion in back taxes. While MTN maintained that the
AGF was beyond his remit, the AGF sought to justify his demands.
continued today as MTN Nigeria and the Attorney General of the Federation and
Minister for Justice continued their legal battle over the appropriateness of
the latter’s demand for $2 billion in back taxes. While MTN maintained that the
AGF was beyond his remit, the AGF sought to justify his demands.
At a
hearing in the Federal High Court in Ikoyi, Justice C J Aneke heard arguments
relating to the substance of the AGF’s preliminary objection (from November
2018), the detail of which was only filed in court by the Attorney General late
on March 25th, and which has yet to be served on MTN. The arguments did
not focus on the substance of MTN’s suit, as the AGF’s preliminary objection
that MTN did not commence legal proceedings within 3 months of the cause of
action arising must first be addressed.
hearing in the Federal High Court in Ikoyi, Justice C J Aneke heard arguments
relating to the substance of the AGF’s preliminary objection (from November
2018), the detail of which was only filed in court by the Attorney General late
on March 25th, and which has yet to be served on MTN. The arguments did
not focus on the substance of MTN’s suit, as the AGF’s preliminary objection
that MTN did not commence legal proceedings within 3 months of the cause of
action arising must first be addressed.
MTN’s
team of lawyers led by Chief Wole Olanipekun maintained that the AGF’s
contentions were unacceptable and unknown to law. They argued that the cause of
action actually crystalised when the AGF made a demand of MTN and threatened
the company with court action on August 20th. Previous correspondence from the
AGF was acted upon in good faith by the company, he continued. He revealed that
the previous correspondence had requested a self-assessment.
team of lawyers led by Chief Wole Olanipekun maintained that the AGF’s
contentions were unacceptable and unknown to law. They argued that the cause of
action actually crystalised when the AGF made a demand of MTN and threatened
the company with court action on August 20th. Previous correspondence from the
AGF was acted upon in good faith by the company, he continued. He revealed that
the previous correspondence had requested a self-assessment.
He
posited that the organization not only undertook the self-assessment but went
ahead to submit the result of that process to the AGF’s office. The assessment
was undertaken by KPMG and showed clearly that no back taxes were owed to the
Country. Despite this, the letter of August was still written. That letter
heightened issues and led to the company seeking to protect itself from the unlawful
actions of the AGF.
posited that the organization not only undertook the self-assessment but went
ahead to submit the result of that process to the AGF’s office. The assessment
was undertaken by KPMG and showed clearly that no back taxes were owed to the
Country. Despite this, the letter of August was still written. That letter
heightened issues and led to the company seeking to protect itself from the unlawful
actions of the AGF.
The
learned SAN further argued that to the extent that the letter has not been
withdrawn, the cause of action continues to exist. Therefore MTN remains within
its rights to approach the courts. Counsel to AGF was asked directly whether
the cause of action had been withdrawn (and so the demand itself withdrawn) but
declined to respond.
learned SAN further argued that to the extent that the letter has not been
withdrawn, the cause of action continues to exist. Therefore MTN remains within
its rights to approach the courts. Counsel to AGF was asked directly whether
the cause of action had been withdrawn (and so the demand itself withdrawn) but
declined to respond.
The
Chief further posited that from the AGF’s pleadings his office had admitted the
submission of MTN in so far as his main argument is not in response to the core
issues raised by MTN, but to whether or not the AGF is protected in law from
the consequences of his actions. The Chief argued that it is implicit in the
AGF’s failure to address the substance of MTN’s case, that the AGF is aware it does
not have the legal authority to take the action it has taken.
Chief further posited that from the AGF’s pleadings his office had admitted the
submission of MTN in so far as his main argument is not in response to the core
issues raised by MTN, but to whether or not the AGF is protected in law from
the consequences of his actions. The Chief argued that it is implicit in the
AGF’s failure to address the substance of MTN’s case, that the AGF is aware it does
not have the legal authority to take the action it has taken.
Justice Aneke, after hearing the submissions of learned
counsel to both parties, reserved ruling on the preliminary objection until May
7th.
counsel to both parties, reserved ruling on the preliminary objection until May
7th.
MTN Nigeria instituted the suit by a writ dated September
10, challenging the legality of the AGF’s assessment of its import duties,
withholding of tax and value-added tax in the sums of N242 billion and 1.3
billion dollars. In the suit, MTN claims that a revenue assets investigation
allegedly carried out by the Federal Government on MTN over the period from
2007–2017 violates Section 36 of the Constitution of the Federal Republic of
Nigeria. It also claims that the government’s August 20 letter stating the tax
demand to the company contravenes the provisions of the section.
10, challenging the legality of the AGF’s assessment of its import duties,
withholding of tax and value-added tax in the sums of N242 billion and 1.3
billion dollars. In the suit, MTN claims that a revenue assets investigation
allegedly carried out by the Federal Government on MTN over the period from
2007–2017 violates Section 36 of the Constitution of the Federal Republic of
Nigeria. It also claims that the government’s August 20 letter stating the tax
demand to the company contravenes the provisions of the section.
The telecoms company seeks a declaration that the defendant
(AGF) acted in excess of his powers by demanding an assessment, which MTN
claims, usurped the powers of the Nigerian Customs Service to demand import
duties and the powers of the Federal Inland Revenue Service to audit and demand
remittance of withholding tax and value-added tax.
(AGF) acted in excess of his powers by demanding an assessment, which MTN
claims, usurped the powers of the Nigerian Customs Service to demand import
duties and the powers of the Federal Inland Revenue Service to audit and demand
remittance of withholding tax and value-added tax.
Over-reach
by the AGF has been a consistent theme recently, with President Muhammadu
Buhari already having ordered him to terminate a separate agreement through
which he sought to collect supposedly ‘additional recoverable revenue’ from the
International Oil Companies.
by the AGF has been a consistent theme recently, with President Muhammadu
Buhari already having ordered him to terminate a separate agreement through
which he sought to collect supposedly ‘additional recoverable revenue’ from the
International Oil Companies.