MTN Nigeria Communications LTD has been accused by Babatunde Fowler, chairman of the Federal Inland Revenue Service (FIRS), of deducting tax from the N330 billion fine it paid to the Nigerian Communications Commission (NCC). The penalty was imposed in 2015 over SIM card registration infractions.
Fowler maintained that fines and penalties for regulatory infractions are revenues paid to the Federal Government and should not be subjected to any tax deduction.
“The MTN took a position that the fine or penalty should be tax-deductible. But the FIRS said that does not make sense. One cannot be given a penalty or fine, which is a punitive measure, and the company is saying it is tax-deductible so that it will get a tax credit on that,” the FIRS boss added.
The NCC had in October 2015 imposed a fine of N1.04 trillion on the telecommunications giants for non-compliance with a deadline set by the Commission to disconnect all unregistered SIM cards.
The move by NCC followed accusations by mobile phone users that the regulator had failed to bring operators to account for poor services to subscribers.
The regulator later reduced the fine to N780 billion in December 2015, having taken into consideration the stability of the telecommunication sector. The fine was further reduced to N330 billion after MTN agreed to be listed on the Nigeria Stock Exchange (NSE).
The agreements have now been fulfilled by MTN, including the listing of 20.3 billion shares in May this year.