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MTN Nigeria denies Osun unpaid taxes claim

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By Abiodun Okunloye

Over ₦900 million in taxes are linked to the installation of fibre optic cables.

The claims made by the Osun State government regarding MTN Nigeria’s unpaid taxes amounting to over ₦900 million linked to the installation of its fiber optic cables has been refuted. These allegations, presented by the state’s consultant Global Transactions Nigeria Limited (GTNL), claim that MTN installed more than 270 kilometers of fiber cables in Osun without fulfilling Tax obligations. GTNL publicly called out the telco for their suspected failure to abide by local laws and regulations, raising concern among the public.

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Osun State Ministry of Innovation, Science, and Technology has taken action by submitting a complaint to the Nigerian Communications Commission (NCC). They claim that MTN did not provide important information during their partnership with Odua Infraco for fiber deployment. This complaint has turned into a serious disagreement, as the state is now accusing MTN of not paying taxes and not sharing important information with local officials. MTN Nigeria responded to the accusations in a letter on June 30, 2024, explaining the situation to the NCC.

Right of Way fees to Odua Infraco caused the major challenge.

They stated that the fiber optic project in Osun was done in collaboration with Odua Infraco, a company linked to the Osun State government. MTN made it clear that they had secured all required permits and authorizations from the state government before starting the project. MTN clarified that it has successfully paid all Right of Way (RoW) fees to Odua Infraco as required by their contract. In a letter to the NCC, MTN alleged that Osun State, with the help of GTNL consultant, has been falsely claiming unpaid taxes and trying to handle the payment through the consultant.

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Also, MTN emphasized that any dispute between Osun State and Odua Infraco regarding their RoW agreement must not impact the preexisting contracts between MTN and Odua. The main issue at hand is the disagreement over RoW fees, which are payments made to governments or their representatives for permission to install Infrastructure like fiber optic cables in public areas. MTN had collaborated with Odua Infraco, a licensed company, to utilize its ducts in Osun State, relying on RoW approvals previously given by the state’s Ministry of Innovation, Science, and Technology.

Much effort has been put into the dispute resolution.

Furthermore, the telco firmly asserted that the agreement was legally binding and that the state government was fully informed about the collaboration. Following the completion of the agreement, Osun State encountered difficulties with Odua Infraco. The state tried to end its association with the company, instructing MTN to stop working with Odua and instead collaborate directly with GTNL. MTN objected to this request, stating that its legal responsibilities were connected to Odua Infraco and could not be changed by the state without proper procedures.

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In this stead, the telco has been working diligently to settle the disagreement, seeking collaboration with key members of the Osun State Executive Council, such as the Commissioners for Finance, Environment, and Sanitation, along with the Attorney General, hoping to find a peaceful solution. However, progress has been hindered by the sluggish pace, as Osun State remains steadfast in demanding the ₦900 million payment through GTNL. MTN has decided to halt all payments to Odua Infraco until the issue is resolved to safeguard its interests. Additionally, the telecom giant has reached out to the NCC for assistance in resolving the dispute. They hope that the NCC will intervene in the dispute to ensure smooth business operations.

Related Article: Telco operators seek tariff increase from FG

Lastly, the conflict between the telco and Osun State is just one example of the obstacles that telecommunications companies in Nigeria face when dealing with regulatory issues and local partnerships. Disputes over RoW fees and adherence to state regulations have always been present, but the current situation highlights the significant risks to infrastructure development in the country. Resolving the dispute is essential for the company’s expansion plans. Meanwhile, the state government’s push to collect unpaid taxes shows its dedication to enforcing local regulations on big businesses.

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