The Federal High Court in Lagos has affirmed the $87.9 million in penalties and interest imposed on MTN Nigeria Communications Plc by the Federal Inland Revenue Service (FIRS).
Justice Ayokunle Faji delivered the ruling in an appeal filed by FIRS, challenging the October 20, 2023, judgment of the Tax Appeal Tribunal (TAT). The court upheld FIRS’ claims, overturning the tribunal’s decision to exclude penalties and interest.
The tribunal had initially awarded $71 million as the principal sum but declined to grant FIRS’ request for additional penalties and interest. Dissatisfied, FIRS, through its legal team—Bolanle Oniyangi leading Moses Ideho and Olufemi Asekun—filed an appeal (FHC/L/1A/2024) before Justice Faji, urging the court to reverse the tribunal’s ruling.
The FIRS specifically sought:
”An order nullifying the decision of the Tax Appeal Tribunal (TAT) Panel 3, delivered on October 20, 2023.
“An order instructing the Appellant to recover all penalties and interest arising from the principal sum as determined by the Tribunal’s judgment.
In its Brief of Argument filed on April 4, 2024, FIRS presented two key issues for determination:
“Whether the Tribunal erred by refusing to grant the Appellant the penalties and interest after affirming that the Respondent’s goods and services were subject to Value Added Tax (VAT).
“Whether the Tribunal was correct in applying the Company Income Tax Act (CITA) to dismiss the assessments on penalties and interest under the Value Added Tax Act.
FIRS urged the court to decide these issues in its favor and grant its requested reliefs.
MTN, represented by its lawyers Agada S. Agada and P. Baiyere, filed a Brief of Argument on April 19, 2024, contesting FIRS’ claims. The telecom company raised a single issue for determination:
“Whether the Tribunal acted wrongly in setting aside the penalties and interest imposed by FIRS on the Respondent’s VAT liability.
MTN’s counsel maintained that the tribunal was correct in its interpretation of Section 13(2) & (3) of the 5th Schedule to the FIRS Act, arguing that FIRS’ appeal had no basis in law.
In response, FIRS filed a reply on May 8, 2024, reiterating its arguments and insisting that its position was founded on ground 2 of the Notice of Appeal. It urged the court to uphold its claims and affirm that the tribunal’s decision should be overturned.
On January 24, 2025, Justice Faji ruled in favor of FIRS, dismissing MTN’s arguments and setting aside the Tribunal’s judgment.
Citing multiple legal authorities, Justice Faji declared:“I must therefore resolve the sole issue against the respondent. I find merit in this appeal.”
He further held: “The decision of the TAT, as recorded on page 750, which excluded interest and penalties from MTN’s obligations to FIRS, is hereby overturned.”
“This appeal is successful. The reliefs sought are granted as prayed.”
