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$2b tax litigation: MTN lawyers say AGF’s legal arguments unacceptable, unknown to law
BY: Sandra Ani
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The learned SAN further argued that to the extent that the letter has not been withdrawn, the cause of action continues to exist.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 Counsel to AGF was asked directly whether the cause of action had been withdrawn (and so the demand itself withdrawn) but declined to respond.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.
News
Badaru on Operational Tour of 82 Division, other Military Installations in Enugu and Imo States
The Honourable Minister of Defence H.E Mohammed Badaru Abubakar CON mni is currently in Enugu on operational tour of 82 Division of Nigerian Army and other military platforms in Enugu.
He was received on arrival by the General officer Commanding 82 Division of the Nigerian Army / Commander JTF SE of operation Udoka Major-General H.T Dada and other senior military officers.
The Minister is expected to meet with South East stakeholders on the way forward.
Details later…
Tinubu has granted full oversight responsibilities to Ministers of State over agencies under them amongst whom are Minister of State for Defence Dr. Bello Matawalle, Water Resources and Sanitation, Minister of State for Agriculture and others will henceforth enjoy full oversight responsibilities over such agencies.
President Bola Tinubu at FEC Meeting has approved that ministers of state be given full powers to supervise the agencies under them, the cable reported.
Until now, files pertaining to departments and agencies under their supervision were sent by their permanent secretaries to the senior ministers.
With the new dispensation, ministers of state can now grant all necessary administrative approvals on the governance process of these agencies and departments.
According to a source in the office of the head of service of the federation, “the president was not pleased with the prevailing governing framework in which ministers of states were just ministers in name”.
This, Tinubu reportedly said, led to the “underutilisation of the expertise and capabilities” of most ministers of state.
“The president believes ministers of state should have the right to make decisions and direct action within their areas of responsibility,” the official added.
According to the Cable report, the source said the idea, first mooted by Hadiza Bala Usman, special adviser to the President on policy coordination and head, central delivery coordination unit got an instant buy-in from the President.
With the new directive, the administration hopes “to unleash” the potential of all the ministers, the source added.
…It’s unprecedented to earn above minimum wage in Enugu- Labour
… We’ll commence implementation immediately- ALGON
Governor of Enugu State, Dr. Peter Mbah, has approved N80,000 minimum wage for the state’s work force, including local government workers, effective October 2024, noting a direct link between a motivated workforce and his administration’s vision of growing the state’s economy from $4.4bn to $30bn.
The new minimum wage covers all state employees, primary school teachers, and local government workers.
Organised labour has described the wage as unprecedented, as it was the first time that Enugu workers would be earning above the national minimum wage.
Mbah announced the new minimum wage on Thursday after a meeting with the Enugu State Minimum Wage Implementation Committee headed by the Head of Service, Kenneth Ugwu and labour leaders, including the state’s labour leaders.
Mbah said, “Few weeks ago, I inaugurated a committee with the responsibility to oversee the implementation of the New National Minimum Wage in Enugu State. Today, I’m happy to announce a new minimum wage for workers in Enugu State, reflecting our fidelity to their welfare, in regard of which we have been resolutely committed.
“We have approved the sum of N80,000 as the new minimum wage in Enugu State. This underscores our commitment to bequeathing lasting legacies of improved living conditions.
“Our commitment to improved workers’ welfare runs deep, and is rooted in the firm understanding of the inextricable link between an inspired workforce and the audacious economic targets we had set our sights on.
“We clearly understood that reducing poverty to the barest minimum and achieving an unprecedented economic growth target were contingent on the output of the workforce. Therefore, for us, the best way to acknowledge that labour creates wealth is by ensuring that the workforce, which creates the wealth that oils the wheel of government, is sufficiently motivated.
“We have similarly demonstrated our commitment to workers welfare through the consistent payment of the wage awards, a gesture we had pledged to sustain until a new wage structure took effect.”
Speaking, the Chairman of the Enugu State chapter of the Nigeria Labour Congress, NLC, Comrade Fabian Nwigbo, thanked governor Mbah for always prioritising the welfare of workers, describing the new minimum wage as “a great one for Enugu workers.”
“In the past, when minimum wage is announced, it takes up to one or two years for anything to happen; and when it did, we took anything they gave us as we saw it. But today, you have even given us something much higher than national minimum wage.
“But I am not totally surprised because when other governors were paying N12,000 wage award, you were paying us N25,000. When others paid for some months and stopped, you continued paying it until the new minium wage as you promised. So, we have enjoyed wage award for 11 months and today you announced the minimum wage which is the first of its kind since my 32 years in service,” said.
Speaking to Government House correspondents, the Chairman of the Enugu State chapter of the Trade Union Congress, TUC, Comrade Ben Asogwa, said, “We are so happy. The governor did not just announce ₦80,000 minium wage, but said that it cascades down to even local government workers. He said that he does not want disparity in salary implementation in Enugu State anymore because we all go to the same market.
“This is the first time in history we are seeing the implementation of minimum wage above the approved amount by the federal government. Actually, when we entered into the negotiation, we were afraid because we know quite well that we are not among the states that share in dividends of oil money. We know quite well that we are at the back when it comes to federal allocation, but His Excellency actually surprised us.
“One thing we have seen is that he understands the impact of motivation on productivity. The governor has set a pace and we know that any other person coming after him will have the challenge to meet up with the target set by His Excellency, Governor Peter Mbah.”
On his part, Chairman of the Association of Local Government Workers, ALGON, Enugu State, Hon. Okechukwu Edeh, pledged the commitment of council chairmen to implementing the new minimum wage.
“When you motivate workers, they become more productive. What I am promising on behalf of the Enugu ALGON family is that we are going to cascade the new minimum wage to the local government level. Implementation begins immediately,” he said.
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