MTN and Nigeria’s Overzealous Law Officers
Since 2015, MTN Nigeria has been in the eye of the storm for a number of reasons with different stakeholders relating directly and indirectly to its business.
From the NCC in 2015 over the issue of unregistered SIM cards to the embargo on the operation and use of the Visafone spectrum, which it purchased with the sanction of the industry regulator. The company ran into another issue with the Senate bordering on funds repatriation, which a senator, Dino Melaye, labelled illegal. In 2015, the Senate set up a committee led by the chairman of the Committee of Banking, Senator Rafiu Ibrahim to investigate the issue, and in 2017, a resolution was passed giving MTN a clean bill of health.
Staying true to the maxim of “being big comes with its own challenges”, MTN is by far Nigeria’s largest telco, serving over 53 million subscribers and enabling over 2 million businesses. The company has spent over 4 trillion Naira in building its telecom infrastructure ‘everywhere you go’ in the country, asides the knowledge transfer over the years and its huge role in building the vibrant telecommunications industry that we know today.
In its infancy, the total number of telephone subscribers in the country was less than 400,000 with its contribution to national GDP negligible at best.
Today, the industry has over 120 million subscribers across 6-7 networks, with a teledensity of 110%, contributing about N2 trillion to the national economy. The industry has recently become the highest per capita in job creation, employing millions of Nigerians directly and indirectly. MTN alone is responsible for over 30.
Despite this appreciable industry growth, powered by the huge contribution from a company with which has paid well about N1.2 trillion Naira in taxes and levies, the sector is still faced with challenges that are likely to retard its further growth should the government decide not to understand the importance of ensuring the security of investor rights.
Companies such as MTN pay in more ways than one. From the willful vandalisation, and in some cases, destruction of its facilities to multiple taxation, unwarranted regulatory fines, and now the resuscitation of a matter that is believed to have been concluded by the senate since 2017, it is tough being the top dog.
In the last two weeks, MTN has provided evidence of complying by the rules, maintaining that it complied with established laws and regulations. Everyone, including financial experts and lawyers, have lent their voices in the same manner, stating that MTN has not broken any law in generating and repatriating its revenue between 2006 to 2016 because the fund in question were company profit. The company deemed it fit to repatriate a part of its profits to its foreign investors. More importantly, MTN has duly paid the tax and levies allowable on the same funds.
If Section 24 of the NIPC Act is anything to go by, nobody has any right to question MTN’s action in anyway. The act clearly states that “… a foreign investor in an enterprise to which this Act applies shall be guaranteed unconditional transferability of funds through any authorised dealer in freely convertible currency of (a) dividends and profits (net of all taxes) attributable to the investment…”
It is therefore surprising to see the AGF coming out to do a job that is exclusive to the nation’s tax officials, alleging that MTN is owing $2 billion in back taxes. Let’s be clear what the AGF is doing here, he is essentially accusing MTN of tax evasion.
The AGF’s claim would suggest that he is somewhat out of tune with how the laws and regulations relating to financial reporting work. It is believed that the telecommunication giant files its financials every year and the FIRS receives tax that is commensurate with income declared in the financial report on behalf of the Nigerian government.
The question is, whose money are we talking about here? The FIRS has not come out to say that MTN is owing any tax. In addition to this, everything in the public domain shows that MTN is compliant with the extant laws and all that is required of a law abiding corporate citizen.
The issue of the Certificates of Capital Importation (CCIs), in one’s opinion, is a clear administrative issue that one would have expected the government to treat with caution and clarity, especially because the banks whose responsibility it is to handle the CCI on behalf of MTN are questioning the CBN’s morality to slam a fine on them for an action it granted its permission to in the moment.
While MTN continues to vehemently deny all allegations leveled against it and has proceeded to seek judicial action against the AGF and CBN, it would appear that in this case, the giant might be feeling the pain of an unswerving band of overzealotry.
