A Federal High Court in Lagos has upheld the $87.9 million penalty imposed on MTN Nigeria Communications Plc by the Federal Inland Revenue Service (FIRS) in a landmark judgment delivered on Tuesday.
Justice Ayokunle Faji ruled in favor of the FIRS, setting aside a previous ruling by the Tax Appeal Tribunal (TAT), which had only awarded MTN a principal sum of $71 million in a tax dispute. The tribunal had refused to grant additional penalties and interest as requested by FIRS, leading the tax agency to appeal the decision.
In his judgment, Justice Faji emphasized that the TAT had erred by excluding the penalties and interest arising from MTN’s principal value-added tax (VAT) liability. The judge stated that the Tribunal’s refusal to grant the additional fines was unjustified and declared that MTN must comply with the full penalty sum.
“The decision of the TAT that interest and penalties were not due is hereby set aside,” Justice Faji ruled, affirming the original fines imposed by FIRS.
MTN, in its defense, had argued that the tribunal’s dismissal of the penalties was correct, asserted that the application of the Company Income Tax Act to the matter was inappropriate. However, the court disagreed with MTN’s position, granted FIRS the reliefs it sought in the appeal.
The decision has significant implications for the telecommunications sector, underlining the importance of compliance with tax laws and the full enforcement of penalties for violations.
The $87.9 million penalty included both the principal VAT sum and the accumulated interest, marking a key development in Nigeria’s tax enforcement strategy.
