A Federal High Court sitting in Lagos has adjourned till May 7 a case between MTN and the attorney-general of the federation (AGF), Abubakar Malami.
MTN Nigeria Communication Ltd had filed a suit last year challenging the legality of the AGF’s assessment of its withholding tax and value-added tax.
Malami alleges that MTN owes $2 billion in back taxes over a 10-year period, relating to the importation of foreign equipment into the country as well as payments to the suppliers of the said equipment.
The telco giant has denied the allegations.
In its preliminary objection, the AGF argued that the plaintiff, in seeking redress to the subject matter, has just three months from the date of the cause of action arose to institute the action.
He argued that the plaintiff commenced the suit in clear disregard to section 2 of the Public Officers Protection Act, which provides that any action commenced against a public officer must be made within three months from the commencement of a cause of action.
The AGF argued further that the plaintiff’s failure to commence the suit within three months as stipulated by law robs the court of jurisdiction to entertain same.
But MTN argued that it commenced the suit within three months of a demand notice from the AGF.
In its writ of summons, the telco giant is seeking declaratory reliefs on the following grounds:
That the purported “revenue assets investigation” allegedly carried out by the Federal Government on MTN, for the period of 2007 to 2017, and its decision conveyed through the office of the AGF by a letter dated Aug. 20, violates the provisions of section 36 of the constitution.
A declaration that the AGF acted in excess of its powers, by purporting to direct through its letter of May 10, a “self-assessment exercise” which usurps the powers of the Nigerian Customs Service to demand payment of import duties on the importation of physical goods.
A declaration that the AGF acted illegally, by usurping the powers of the Federal Inland Revenue Service, to audit and demand remittance of withholding tax and value-added tax.
A declaration that the purported “self-assessment” exercise instituted by the AGF via its letter of May 10 is unknown to the law, null and void and of no effect whatsoever.
In addition, the plaintiff wants a court order vacating the AGF’s demand letter dated Aug. 20 for the sums of N242 billion and $1.2 billion from MTN Nigeria Communications Ltd. Besides, MTN is claiming a total sum of N3 billion in damages against the defendant, which covers general damages, exemplary damages, and legal costs.
After listening to respective submissions of counsel, Justice Chukwujekwu Aneke reserved ruling on the preliminary objection until May 7.
MTN plans to list its Nigerian unit, which has 58 million mobile-phone subscribers, once the tax issue is resolved. The listing will make it the most capitalised company on the bourse by revenue, having made sales of N1 trillion ($3 billion) last year.
OLUFIKAYO OWOEYE
