MTN Contributes N200 Billion Monthly In VAT, Says Tax Committee

MTN Contributes N200 Billion Monthly In VAT, Says Tax Committee

Taiwo Oyedele, Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, has revealed that MTN Nigeria pays over N200 billion in Value Added Tax (VAT) each month, making it the largest contributor to the country’s VAT revenue…READ MORE...

Oyedele made this statement while participating as a panelist during Channels Television’s Town Hall on Tax Reforms. He highlighted existing inequities in the current VAT distribution system and discussed proposed reforms to address these issues.

The tax expert pointed out that all VAT collected from MTN is currently attributed solely to Lagos State, where the company’s headquarters is located, despite the fact that the services generating this revenue are consumed all over Nigeria.

“MTN is the foremost contributor to VAT in Nigeria, with a monthly payment exceeding N200 billion; the difference between MTN and the second-largest contributor is significant,” Oyedele noted.

He continued, “All VAT remitted by MTN is credited to Lagos State, even though their services are utilized in Kano, the FCT, Ekiti, Edo, and Kebbi.”

As part of the reform bill, adjustments are proposed to ensure VAT revenues are distributed more equitably among states based on actual consumption rather than the corporate headquarters’ location.

To illustrate the potential impact of these reforms, Oyedele presented a hypothetical model showing how MTN’s VAT contributions might be redistributed.

He explained that under the proposed framework, Lagos, which currently retains the entire N200 billion, would see its share decrease to around 20%, benefiting other states with a more equitable distribution of funds.

“This change guarantees that states generating the VAT revenue receive their appropriate share,” Oyedele stated. “While Lagos State’s allocation would see a modest reduction, every other state would benefit.”

The tax reform bill seeks to address long-standing challenges in Nigeria’s fiscal policies, incorporating measures for revenue redistribution, reducing inefficiencies, and enhancing fairness within the tax system.

The proposed reforms have sparked recent debates, with some critics arguing that the committee’s initiatives may negatively impact certain stakeholders.

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