MultiChoice Agrees to Pay N35.4Bn as Part of  FIRS Tax Claim

MultiChoice Group has agreed to pay N35.4 billion as part of its tax obligations to the Federal Inland Revenue Service (FIRS).

This is about 10per cent of the initial claim filed by the Nigerian tax authorities, after a long period of negotiation.

Multichoice is the owner of DStv, Gotv, both popular subscription-based platforms in Nigeria.

According to a statement by the group, the total tax amount (35.4 billion naira) will be offset against the security deposits and good faith payments made to date.

This follows the country’s Federal Inland Revenue Service decision to freeze MultiChoice Nigeria’s accounts in 2022 after serving the Group with a 1.8 trillion naira ($1.27 billion) tax claim for its Nigeria operation and a $342 million claim for value-added taxes.

The tax agency claimed that it relied on the power it derived from Section 49 of the Companies Income Tax Act of 2004 as amended and Section 31 of the FIRS (Establishment) Act No. 13 of 2007.

Similar: MultiChoice suffers $50.2 million after-tax loss between April 1-Sept 30

The FIRS also explained that the decision to appoint the banks as agents and to freeze the accounts was a result of the groups’ continued refusal to grant FIRS access to their servers for audit

Technext24.com reported that the Muhammad Nami, then executive chairman of the FIRS, was quoted as saying, “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.

At that time, the FIRS noted that the level of non-compliance by Multi-Choice Africa (MCA), the parent Company, the Multichoice Group was alarming.

It added that the parent company, which provided services to Multichoice Nigeria had never paid Value Added Tax (VAT) since its inception.

MultiChoice went to court to challenge the penalty imposed by the tax authority. However, the South African company subsequently withdrew all pending lawsuits and the Federal Inland Revenue Service agreed to conduct a forensic audit of MultiChoice’s accounts to determine the company’s tax liability.

The Multichoice group agreed to pay a total of $37.5 million, about 10% of the initial claim filed by the Nigerian tax authorities, after a long period of negotiation.

Multichoice to allow users share DStv streaming accounts

Technext24.com recall that in 2021, the FIRS issued notices of Assessment and Demand Notices in the sum of N1.8 trillion on MultiChoice. Subsequently, a Tax Appeal Tribunal (TAT) sitting in Lagos has ordered Multichoice to pay 50% of the N1.8 trillion which it had determined to be the amount the company hasn’t made in tax payments.

Similar: Multichoice confirms Nigerians will pay more for DStv, GOtv subscription from May 1st

Nigeria contributes about 34 per cent of total revenue for the Multi-Choice group. Next to Nigeria is Kenya with 11 per cent and Zambia in third place with about 10 per cent.

According to the group’s reports, the rest African countries where they have a presence account for 45 per cent of the group’s total revenue.

Additional report by technext24.com