MultiChoice Denies It Has to Pay $2.2-Billion Tax Backlog to Nigeria

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South African entertainment powerhouse MultiChoice has disputed reports that it has been ordered by a Nigerian appeal tribunal to pay 50% of an N1.8-trillion ($4.4-billion) disputed tax backlog imposed on it by Nigerian authorities.

MultiChoice had to pay $2.2-billion as a deposit and the condition of the satellite pay-TV company’s case being heard by authorities, Nigeria’s Federal Inland Revenue Service (FIRS) said in an email statement on Wednesday. Media24 reports that the case had been adjourned for hearing on 23 September.

However, MultiChoice Nigeria replied in a statement that the direction issued by the tribunal does not legally compel the company to pay 50% of N1.8-trillion, being half of the disputed tax assessment which is under appeal.

“The direction issued by the TAT in accordance with paragraph 15(7) of the Fifth Schedule to the FIRS Establishment Act requires Multichoice Nigeria to deposit with FIRS an amount equal to the tax paid by Multichoice Nigeria in the preceding year of assessment or one half of the disputed tax assessment under appeal, whichever is the lesser amount plus 10%,” FIRS says in the statement.

“The lesser amount is the tax paid by Multichoice Nigeria in the previous assessed year which is substantially less than the disputed assessment.”

MultiChoice says that it continues to engage with FIRS in an attempt to resolve the issue.

FIRS Freezes MultiChoice Nigeria’s Accounts

Last month, FIRS instructed banks in the country to freeze the accounts of MultiChoice’s subsidiary in Nigeria for allegedly breaching agreements and denying access to their records for auditing.

“It was discovered that the companies persistently breached all agreements and undertakings with the Service, they would not promptly respond to correspondences, they lacked data integrity and are not transparent as they continually deny FIRS access to their records,” FIRS said at the time.

MultiChoice responded that despite the crackdown by FIRS, its operations in Nigeria were continuing as normal.

By Luis Monzon
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