GRBusiness

UPDATE: MTN replies CBN’s letter on CCIs and AG’s $2bn tax compliance demand

Published

6 years ago

September 4, 2018

Following the receipt of the letter from the Central Bank of Nigeria on foreign exchange repatriation, MTN Nigeria (“the Company”) has today provided an update on the company’s position on the issue.

The company said it has also notified the market, and all stakeholders that it has received a notice from the Attorney General of Nigeria that he intends to recover up to US$ 2 billion of tax relating to, inter alia, import duties, VAT and withholding taxes on foreign imports/payments.

MTN continues to strenuously deny the allegations being made by the Central Bank of Nigeria and has provided further clarity on the company’s position. MTN equally strenuously rejects the findings of the Attorney General’s investigation and believes it has fully settled all amounts owing under the taxes in question.

MTN said it is both regrettable and disconcerting that despite the historic engagements with the Nigerian authorities by MTN Nigeria, the senate investigation into the CCI matter, and the multiple tax assessments done by the Nigerian tax authorities over many years that were satisfactorily concluded, that these matters are being reopened.

Speaking on the CBN allegations MTN Corporate Relations Executive Tobe Okigbo said: “From the CBN’s own letter and subsequent statements, it is clear that there is no dispute that the capital captured in MTN’s books and for which CCIs were issued was imported into Nigeria, and this is acknowledged explicitly by the CBN. It is equally clear that Nigerian law provides for guaranteed unconditional transferability of funds through an Authorised dealer in freely convertible currency relating to dividends or profits attributable to the investment, payments and in respect of loan servicing where a foreign loan has been obtained.”

He went on to say: “All dividend repatriation done by MTN Nigeria to its shareholders was done on the basis of its equity capital and all the historic dividends were declared against valid equity CCIs and in fact no preference dividends were declared and no interest in respect of these preference shares was paid. This means that it is incorrect to suggest that the conversion of a shareholder loan to preference shares has any relation to the repatriation of dividends. The two are simply not connected and we are trying to understand this position that the Central Bank has taken.”

Speaking on the Attorney General’s ‘demand notice’ for historical tax obligations, Mr Okigbo said: “MTN has conducted a detailed review of these claims, and provided evidence of tax remittance to the Attorney General’s office. The Attorney General’s notice indicates that he is rejecting this evidence. We believe that all taxes due to the Nigerian government have been paid and these allegations have not been raised by any of the revenue generating agencies that MTN engages with regularly, and from whom MTN has received numerous awards for compliance.”

MTN Nigeria will continue to engage with the relevant authorities on all these matters and we remain resolute that MTN Nigeria has not committed any offences and will vigorously defend its position.

Update on the CBN letter on foreign exchange

MTN Group and the original shareholders injected a total of $402, 625,419 into MTN Nigeria between 2001 and 2006 in the form of loans and equity.

These initial inflows were the basis for the issuance of various legacy CCIs obtained from Authorized Dealers in accordance with regulations.

The inflow of capital has been confirmed by the CBN.

The CCI process is essentially in place both for the protection of investors as well as to provide the CBN with documentary evidence for monitoring capital inflows and outflows.

Although over time the CCIs have been re-issued, consolidated and re-constituted to reflect the changing MTN capital and shareholding structure, the amount of 402, 625,419, has remained the same.

One aspect of the changing capital structure was the conversion of shareholder loans to preference shares.

It is important to note that all the historic dividends were declared against valid equity CCIs and in fact no preference dividends were declared and no interest in respect of these preference shares was paid.

The Attorney General’s notice of intention to recover tax

The Attorney General notified MTN that his office made a high-level calculation that MTN Nigeria should have paid approximately $2,0 billion in taxes relating to the importation of foreign equipment and payments to foreign suppliers over the last 10 years and he requested MTN Nigeria to do a self-assessment of the taxes in this regard that have been actually paid.

In August 2018 MTN submitted comprehensive documentation to the office of the AG. MTN Nigeria has also completed an initial assessment of the full period which indicates that total payments made to the tax authorities in regard to these foreign imports and payments in aggregate are $700 million. There are valid reasons for the differences between the actual payments and the AG high-level assessment.

“We were notified by the office of the AG last week that they have not accepted the documentation presented and they have given notice of an intention to recover the $2.0bn from MTN Nigeria.

“Based on the detailed review performed MTN Nigeria believes it has fully settled all amounts owing under the taxes in question.

Source: TechEconomy.ng.

Finance

Banks To Now Charge 0.5% Cybersecurity Levy As Directed By CBN; Netizens React

Published

2 weeks ago

May 7, 2024

Alice Ginika Simon

The Central Bank of Nigeria (CBN) has directed deposit money banks in the country to start charging 0.5% cybersecurity levy on some transactions done by their customers.

The apex bank gave the directive in a circular dated May 6, 2024 and sent to all commercial, merchant, non-interest and payment service banks as well as mobile money operators and payment service providers.

“Following the enactment of the Cybercrime (Prohibition, Prevention, etc) (amendment) Act 2024 and pursuant to the provision of Section 44 (2) (a) of the Act, ‘a levy of 0.5% (0.005) equivalent to a half percent of all electronic transactions value by the business specified in the Second Schedule of the Act’, is to be remitted to the National Cybersecurity Fund (NCF), which shall be administered by the Office of the National Security Adviser (ONSA),” the circular partly read.

The Cybersecurity Levy implementation notice

The apex bank said that the implementation of the levy would start two weeks from the date of the circular.

“The levy shall be applied at the point of electronic transfer origination, then deducted and remitted by the financial institution. The deducted amount shall be reflected in the customer’s account with the narration, ‘Cybersecurity Levy’. Deductions shall commence within two weeks from the date of this circular for all financial institutions and the monthly remittance of the levies collected in bulk to the NCF account domiciled at the CBN by the fifth business day of every subsequent month,” the circular said

The apex bank added that this new levy will not be applied on transactions such as loan disbursements and repayments, salary payments, intra-account transfers within the same bank or between different banks for the same customer, intra-bank transfers between customers of the same bank.

Also exempted from the levy were inter-branch transfers within a bank, cheque clearing and settlements, ⁠Letters of Credits, ⁠Banks’ recapitalisation-related funding only bulk funds movement from collection accounts, savings and deposits including transactions involving long-term investments, among others.

This current implementation however is not sitting well with some netizens as they reacted to the new development.

Here were some of their reactions from X.

Finance

EFCC Chairman Tasks Nigerian Youths Against Crimes And Fraudulent Acts

Published

2 weeks ago

May 4, 2024

Alice Ginika Simon

The Chairman of Economic Finance Crime Commission (EFCC), Ola Olukoyede, has stressed the need for Nigerian Youth to see themselves as agents of positive change that have a lot to contribute to the socioeconomic development of the Nation.

Speaking at the 2nd edition of a Leadership Trainings Programme in Abuja, Olukoyede, who was represented by the Head Enlightenment and Re-orientation unit, (EFCC), Aisha Mohammed, said the commission’s dream is to see the youth contribute meaningfully to the society, emphasizing on the need to work together in bringing positive change to society.

The Economic and Financial Crimes Commission Boss declared the readiness of his agency to work with all Stakeholders, including the youth towards changing the narrative and reposition the country to greater exploit.
Also speaking, the representative of the Executive Secretary of Tertiary Education Trust Fund (TETFUND), Sonny Echono, appealed to the youths is to eschew social vices that could deter their full potential in life.

Other speakers at the event, including the Chairperson, Zero Tolerance for Social Immoralities Initiative (ZEITI) Africa, Rasak Jeje called on all stakeholders to join hands in collective pursuit of empowering new generation of leaders to curb the rising tides of social Vice among Nigerian youths.

The Chairperson, Zero Tolerance for Social Immoralities Initiative (ZEITI) Africa, Rasak Jeje made the call while addressing journalists at the 2nd edition of it Leadership Trainings Programme in Abuja on Thursday.
He said the training was aimed to intimate students leaders with knowledge and insights that will help them drive positive change and become exemplary leaders in their respective spheres.

Finance

AISA Has Refunded The Fees Paid By Yahaya Bello To EFCC

Published

3 weeks ago

April 27, 2024

Alice Ginika Simon

The Economic and Financial Crimes Commission (EFCC) says the American International School Abuja (AISA) has refunded the fees paid by the immediate past governor of Kogi state, Yahaya Bello, for his children attending the school.

In response to a letter addressed to the Lagos zonal commander of the EFCC, the school said $845,852 was paid in tuition “since the 7th of September 2021 to date”.

AISA said the sum to be refunded is $760,910 because it had deducted educational services already rendered.

“Please forward to us an official written request, with the authentic banking details of the EFCC, for the refund of the above-mentioned funds as previously indicated as part of your investigation into the alleged money laundering activities by the Bello family.

Since the 7th September 2021 to date, $845,852.84 (Eight Hundred and Forty-Five Thousand, Eight Hundred and Fifty Two US Dollars and eighty four cents) in tuition and other fees has been deposited into our Bank account.

We have calculated the net amount to be transferred and refunded to the State, after deducting the educational services rendered as $760,910.84. (Seven Hundred and Sixty Thousand, Nine Hundred and Ten US Dollars and Eighty Four cents).

No further additional fees are expected in respect of tuition as the students’ fees have now been settled until they graduate from ASIA.”

In a chat with The Cable, the spokesperson of the EFCC, Dele Oyewale, confirmed that the school has refunded the money.

‘’The money has been paid into public account,” Dele Oyewale was quoted as saying