A Federal High Court in Lagos has upheld the sum of $87.9 million in penalties and interest imposed on MTN Nigeria Communications Plc by the Federal Inland Revenue Service (FIRS) over a tax dispute.
Justice Ayokunle Faji, in a ruling on January 24, 2025, overturned an earlier decision by the Tax Appeal Tribunal (TAT), which had awarded only $71 million as the principal sum while excluding penalties and interest.
The judgment came after the FIRS appealed the tribunal’s ruling, seeking full enforcement of the tax assessment.
Dissatisfied with the October 20, 2023 TAT ruling, FIRS, represented by Bolanle Oniyangi, Moses Ideho, and Olufemi Asekun, approached the court with an appeal (FHC/L/1A/2024) requesting:
1. Reversal of the tribunal’s decision to exclude penalties and interest.
2. An order compelling MTN Nigeria to pay all outstanding penalties and interest arising from the VAT assessment.
The FIRS legal team argued that the TAT erred in law by refusing to grant penalties and interest despite establishing that MTN’s purchases were subject to Value Added Tax (VAT).
They further contended that the tribunal misapplied the Companies Income Tax Act (CITA) instead of relevant provisions of the VAT Act.
In defense, MTN Nigeria, represented by Agada S. Agada and P. Baiyere, countered that the tribunal had correctly interpreted the FIRS Act in setting aside the penalties and interest.
The telecom giant maintained that the FIRS’s arguments were not rooted in its Notice of Appeal, rendering them invalid.
However, in his judgment, Justice Faji ruled in favor of FIRS, resolving all disputed issues against MTN Nigeria. He held that:
“I must therefore resolve the sole issue against the respondent. I find merit in this appeal. The decision of the TAT, which excluded penalties and interest from MTN’s tax liabilities, is hereby set aside. This appeal succeeds, and all reliefs sought by the FIRS are granted as prayed.”
With this ruling, MTN Nigeria is now mandated to pay the full $87.9 million—comprising the $71 million principal tax liability and additional penalties and interest.
