Corporate and Commercial 09/02/2024
MultiChoice to Pay FIRS N35.4bn in Tax Penalties
MultiChoice Group has disclosed that its subsidiaries have reached a settlement with Nigeria’s Federal Inland Revenue Service (FIRS) and have agreed to pay a total tax of N35.4 billion.
“In terms of the agreement, [MultiChoice Nigeria] and [MultiChoice Africa] shall pay a total tax amount of N35.4bn (~$37.3m), to be offset against the security deposits and good faith payments made to date,” MultiChoice said in a statement following a shareholders meeting on Thursday.
In June 2021, the tax body froze MultiChoice Nigeria’s accounts and served MultiChoice Group with a N1.8 trillion ($1.27 billion) tax claim for its Nigerian operation and a $342 million claim for value-added taxes (VAT).
“The companies would not promptly respond to correspondences, they lacked data integrity and are not transparent as they continually deny FIRS access to their records,” the then-executive chair of FIRS, Mr Muhammad Nami, said.
“The companies are involved in the under-remittance of taxes which necessitated a critical review of the tax-compliance level of the company. Particularly, [MultiChoice Nigeria Limited] has avoided giving the FIRS accurate information on the number of its subscribers and income,” he added.
The broadcaster which owns DStv, GOtv, Showmax, M-Net, SuperSport, Irdeto, and KingMakers and offers services to over 23.5 million households in 50 markets across sub-Saharan Africa, insisted it did nothing wrong.
In August 2021, the South African entity filed an appeal contesting the N1.8 trillion tax claim with the Tax Appeal Tribunal.
The tribunal ruled that the broadcaster should pay half the amount and MultiChoice paid a $19 million deposit.
In March 2022, MultiChoice and FIRS had “agreed to an amicable resolution of the pending tax matters.” Consequently, MultiChoice withdrew all existing lawsuits while the FIRS conducted a forensic audit to reach an accurate determination of the company’s tax liability.