Bismarck Rewane, Tunji Andrews, Feyi Fawehinmi, other experts speak on MTN Nigeria tax and CCI issues
The Central Bank of Nigeria’s clampdown on telecommunication giant, MTN and four commercial banks has generated huge controversies since it came to public notice.
CBN has claimed that MTN illegally repatriated over $8 billion based on “illegally issued” CCIs by four commercial banks in the country. Nigeria’s largest network provider was also accused of withholding $2 billion in taxes.
The four commercial banks: Stanbic IBTC, Standard Chartered Bank Nigeria, Citibank and Diamond Bank were fined N1,885,852,847.45, N2,470,604,767.13, N1,265,541,562.31 and N250 million respectively.
MTN, which has been directed to immediately refund the money, has, however, denied any wrongdoing. The telco company has disputed the $2 billion tax levy, stating that it paid $700 million for the required taxes over the 10-year-period in question.
It also claims that the apex bank duly approved all dividends it paid to its shareholders between 2007 and 2015. The Nigerian Senate had also exonerated the company from breaching foreign exchange laws when the matter was initially raised about two years ago.
Quite interestingly, the Attorney General of the Federation, Abubakar Malami, is asking for the money to be paid into a separate account different from the CBN.
Many economic experts have since chimed in with different perspectives, particularly on the implications of the saga on Nigeria’s future relationship with foreign investors. The experts are of the opinion that the Federal Government and CBN are not handling the matter tactfully.
The Chief Executive Officer of Financial Derivatives, Bismarck Rewane said on CNBC on Thursday that there is no clarity on where exactly CBN’s issues with MTN and the banks stem from.
Rewane also said it is very unlikely that the four banks would conspire with MTN to falsify documents, adding that the sanction will have huge impact on the productivity in the country.
“Somebody has to come clean and tell us the whole truth,” he says.
Another expert, London-based Nigerian accountant Feyi Fawehinmi, is just as concerned about investors’ relationship with Nigeria due to the sanction, saying that he believes regulatory infractions from businesses need not end with sanctions.
“Sanctions like these, placed on a company that has invested heavily and employed thousands of Nigerians across its operations only sends a message to foreign investors that the bigger your operations are, the more you will be targeted,” Fawehinmi says.
“This was not a one-off infraction on MTN. It was dug up over many years. They have also been paying taxes, so they should not be treated that way. Continued dialogue between regulators and businesses should be explored to resolve these issues.”
Tunji Andrews, an economic expert, is also of the opinion that the Federal Government may be making investments into the Nigerian economy by foreign investors as a result of the hounding of MTN by CBN.
While maintaining that the Federal Government could be more tactful in handling the issue in order not to send the wrong message to other prospective investors, Andrews also noted that MTN “has been the single biggest non-oil investment in Nigeria in the last 20-years” and should not be hounded out of the country.
Many other experts and observers have noted that at a time when the Federal Government is looking to attract more foreign investors in order to fully bounce bank from an economic crisis that has rocked the country for over three years, it needs to handle the situation with MTN more carefully.
