The dust is yet to settle and the facts are yet to be fully established in the claims by telecom giant MTN Nigeria to be this country’s biggest tax payer. Something is fishy in MTN’s claim and Federal Inland Revenue Service [FIRS] is yet to furnish us with the full facts.
Recently, FIRS recognised twenty taxpayers in the country for their commendable contribution and support for the growth of the Nigerian economy. It expressed its appreciation to them for making it possible to achieve remarkable tax collection performance in 2021. This public recognition was meant to elicit corporate rapprochement and bonding. Unfortunately, MTN made mincemeat of FIRS’ good intentions by misrepresenting the facts, all in a bid to blow its own tax-paying trumpet.
In its publication on 1st April 2022 immediately after the awards, MTN said it paid N618.7 billion in direct and indirect taxes to FIRS as a result of which, it alleged, it was recognized as the top taxpayer in the country. Had it said it is among the top twenty taxpayers, that would have been nearer to the truth. It further compounded the falsehood by giving out figures which leave much to be desired. MTN claimed in the publication that the N618.7 billion it paid to FIRS in 2021 represents 13% of N6.4 trillion which, according to Thisday newspaper publication of May 13, 2022, is arithmetically wrong. This act of deliberately misinforming the Nigerian public is suspect at best. It speaks to the issue of profit shifting and tax avoidance for which many a taxpayer is culpable.
The Nigerian economy has suffered on account of those bent on perpetuating this infraction against the Nigerian state and its citizens. When taxpayers/firms issue figures which fall far below the actual amount they make as profit, the taxpaying public is deceived into believing that such taxpayers/firms are not making money and that business or the business environment is not favourable to them. This then belies the humongous profit that such taxpayers/firms repatriate to the metropolis if they are multinationals. This leaves their host country in the dark about their business transactions and its people pauperised. This is what the action of the MTN Nigeria Communications Plc smacks of, and it beats one’s imagination why the giant telecom services provider would stoop so low to indulge in such a demeaning act of sabotage.
MTN Nigeria Plc did not top the recently released list of the twenty taxpayers recognised by FIRS. On the list of awardees released by FIRS, MTN is ranked fifth among nineteen others as top-performing taxpayers. Nigerian National Petroleum Company (NNPC) is ranked the highest taxpayer in the country. According to the list, MTN is mentioned among the top-performing taxpayers and not as the “most tax compliant’’ or “biggest taxpayer” as it claimed in its publication. Fact is not a dead horse; it speaks for itself. As can be seen, the list released by FIRS as well as the figure MTN is claiming to have paid in taxes indicate that MTN is only grandstanding about its tax compliance status.
FIRS however shares in the blame for giving MTN the latitude to behave in this manner by failing to give out on time accurate data and figures regarding its tax compliance status. Why wait for so long before disclosing vital information about taxpayers that Nigerians should know? Even now FIRS needs to release the correct figure of tax paid by MTN Nigeria, not just the rankings of the top taxpayers in the country. It is uncharitable for FIRS to hoard vital information from the public and allow itself to be taken for granted by those who are not guided by enlightened self-interest.
MTN Nigeria is not doing good to anybody or to itself. Rather, it is doing a disservice to the country and the unsuspecting citizens from whom it makes huge profits that it is unwilling to disclose in full. Now that the facts are beginning to come out, Nigerians should be ready to hold both FIRS and MTN to account for the truth behind the figures being bandied about by the latter. It should be made not only to disclose its true tax liability but also pay up in full. On the other hand, FIRS should apply full throttle to its tax drive by enforcing compliance and ensuring that those who are wavering in their tax payment or who show the tendency to short change the government should be made to face the full wrath of the law.
Nigeria can grow its tax potential if it puts its act together to do the needful. the needful here is to make enabling laws and enforce compliance with them. This is the only way to bring into the tax net those eligible taxpayers who are outside it. This way there will be no need for the introduction of new taxes. Modern statecraft cannot be run efficiently without taxation. People who desire progress, improvement and development must commit to the payment of taxes and be concerned when taxes are not paid.
Tauna, a chartered accountant and tax expert, writes from Lagos.