Femi Ashekun/
In a major legal blow to MTN Nigeria Communications Plc, the Federal High Court in Lagos has upheld a staggering $87.9 million in penalties and interest levied by the Federal Inland Revenue Service (FIRS).
The ruling overturns an earlier decision by the Tax Appeal Tribunal (TAT), which had limited MTN’s liability to $71 million in unpaid taxes, excluding penalties and interest.
Presiding Judge, Justice Ayokunle Faji, delivered the decisive judgment on January 24, 2025, in the appeal brought by FIRS against the TAT’s October 20, 2023 ruling. The FIRS argued that the TAT erred in waiving the additional penalties and interest despite finding MTN liable for unpaid Value Added Tax (VAT).
Justice Faji sided with FIRS, stating, “The decision of the TAT to exclude interest and penalties is hereby set aside. This appeal succeeds. All reliefs sought by the FIRS are granted.”
The ruling now mandates MTN to pay the full $87.9 million, comprising the original $71 million tax liability plus penalties and interest.
FIRS, represented by lawyers Bolanle Oniyangi, Moses Ideho, and Olufemi Asekun, argued that the tribunal’s exclusion of penalties and interest violated key provisions of the VAT Act. They maintained that tax compliance must include not only principal sums but also accrued penalties for late payments and interest.
MTN’s legal team, led by Agada S. Agada and P. Baiyere, contended that the penalties were unjustified and cited provisions of the FIRS Act to support their claim.
However, the court rejected their arguments, affirming FIRS’ authority to enforce full compliance with Nigeria’s tax laws.
The judgment comes after months of intense legal wrangling. FIRS filed its appeal in April 2024, seeking to overturn the tribunal’s ruling. MTN countered with its own defense, arguing the tribunal acted within its authority to set aside penalties.
Justice Faji ultimately resolved all issues in favor of FIRS, emphasising that the penalties were lawfully imposed.
For MTN, the decision represents a costly setback, likely impacting its financial position and operational plans in Nigeria. It also highlights the heightened scrutiny facing major corporations operating in the country.
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