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Mar 26, 2019

MTN lawyers say AGF’s legal arguments unacceptable and unknown to law




Fireworks continued today as MTN Nigeria and the Attorney General of the Federation and Minister for Justice continued their legal battle over the appropriateness of the latter’s demand for $2 billion in back taxes. While MTN maintained that the AGF was beyond his remit, the AGF sought to justify his demands.

At a hearing in the Federal High Court in Ikoyi, Justice C J Aneke heard arguments relating to the substance of the AGF’s preliminary objection (from November 2018), the detail of which was only filed in court by the Attorney General late on March 25th, and which has yet to be served on MTN. The arguments did not focus on the substance of MTN’s suit, as the AGF’s preliminary objection that MTN did not commence legal proceedings within 3 months of the cause of action arising must first be addressed.


MTN’s team of lawyers led by Chief Wole Olanipekun maintained that the AGF’s contentions were unacceptable and unknown to law. They argued that the cause of action actually crystalised when the AGF made a demand of MTN and threatened the company with court action on August 20th. Previous correspondence from the AGF was acted upon in good faith by the company, he continued. He revealed that the previous correspondence had requested a self-assessment.

He posited that the organization not only undertook the self-assessment but went ahead to submit the result of that process to the AGF’s office. The assessment was undertaken by KPMG and showed clearly that no back taxes were owed to the Country. Despite this, the letter of August was still written. That letter heightened issues and led to the company seeking to protect itself from the unlawful actions of the AGF.

The learned SAN further argued that to the extent that the letter has not been withdrawn, the cause of action continues to exist. Therefore MTN remains within its rights to approach the courts. Counsel to AGF was asked directly whether the cause of action had been withdrawn (and so the demand itself withdrawn) but declined to respond.  

The Chief further posited that from the AGF’s pleadings his office had admitted the submission of MTN in so far as his main argument is not in response to the core issues raised by MTN, but to whether or not the AGF is protected in law from the consequences of his actions. The Chief argued that it is implicit in the AGF’s failure to address the substance of MTN’s case, that the AGF is aware it does not have the legal authority to take the action it has taken.

Justice Aneke, after hearing the submissions of learned counsel to both parties, reserved ruling on the preliminary objection until May 7th.

MTN Nigeria instituted the suit by a writ dated September 10, challenging the legality of the AGF’s assessment of its import duties, withholding of tax and value-added tax in the sums of N242 billion and 1.3 billion dollars. In the suit, MTN claims that a revenue assets investigation allegedly carried out by the Federal Government on MTN over the period from 2007–2017 violates Section 36 of the Constitution of the Federal Republic of Nigeria. It also claims that the government’s August 20 letter stating the tax demand to the company contravenes the provisions of the section.

The telecoms company seeks a declaration that the defendant (AGF) acted in excess of his powers by demanding an assessment, which MTN claims, usurped the powers of the Nigerian Customs Service to demand import duties and the powers of the Federal Inland Revenue Service to audit and demand remittance of withholding tax and value-added tax.

Over-reach by the AGF has been a consistent theme recently, with President Muhammadu Buhari already having ordered him to terminate a separate agreement through which he sought to collect supposedly ‘additional recoverable revenue’ from the International Oil Companies.
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