MTN HAS had a series of run-ins with the Nigerian authorities and paid a $1billion fine in 2016 related to a failure to disconnect unregistered subscribers. It also agreed to pay just $52.6 million last year to settle the Nigerian Central Bank’s claim over historic dividend repatriations. Tom Saater Bloomberg
JOHANNESBURG – Mobile operator MTN scored a major victory on Tuesday when a Lagos court ruled that it could challenge Nigeria’s attorney general on the federation’s (AGF's) claim of $2 billion (R29bn) in unpaid duties and taxes between 2007 and 2017.

Justice Chukwujekwu Aneke rejected the AGF’s notice of preliminary objection to MTN Nigeria’s lawsuit challenging its authority to deal with issues around tax and customs duties. The court will now hear whether the AGF has the jurisdiction to make the decade-long tax claim next month.

MTN took legal action contesting the authority of the AGF to deal with issues around tax and customs duties.

“According to the law, oversight for this was the responsibility of the Federal Inland Revenue Service and Nigerian Customs Service,” MTN said.

MTN has had a series of run-ins with the Nigerian authorities and paid a $1bn fine in 2016 related to a failure to disconnect unregistered subscribers.

It also agreed to pay just $52.6 million last year to settle the Nigerian Central Bank’s claim over historic dividend repatriations.

This was a fraction of the $8.1bn initial fine for allegedly improperly repatriating monies between 2007 and 2015. The AGF approached the court, urging it strike MTN’s suit off the roll on the grounds that it was instituted outside the time frame prescribed by law. It argued that the time frame was within three months of receipt of the initial request for a self-assessment.

The court ruled the company was only required to file its case within three months of receipt of the actual demand notice, and MTN met the three-month deadline.

The continent's largest mobile operator by subscribers on Tuesday reiterated that it was fully compliant with Nigerian tax laws. It also said it remained committed to meeting its fiscal responsibilities, and to contributing to the social and economic development of Nigeria.

“It is important to note that even if the court ultimately rules that the AGF is within its rights to assess taxes and duties, it does not imply that the assessment that has been made is legitimate,” MTN said.

MTN eased 2 percent on the JSE on Tuesday to close at R103.45.

Peter Takaendesa, a portfolio manager at Cape Town-based Mergence Investment Managers, said that MTN's share price was a reflection that the market had factored in that the case would be postponed.

“The market was expecting a postponement of the case for a later date. Also, no new information has come out from the hearing,” he said.

MTN has however gained lost ground after the hefty fines from Nigerian authorities wiped out two-thirds of its value last year. The share price is now 15 percent higher compared to six months ago, and is trading 19.15 percent higher in the year to date.

“This is a complicated case that could take years and years,” said Takaendesa.

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