April

Africa’s leading cable TV company, MultiChoice Group has announced that its Nigerian subsidiary has agreed to pay about $37.3 million as part of a tax settlement arrangement with the Nigerian tax authorities. Multichoice is the owner of the satellite television, DSTV, a popular subscription-based platform 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 (FIRS) 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: <a href="https://technext24.com/2023/11/15/multichoice-suffers-50-million-loss/">MultiChoice suffers $50.2 million after-tax loss between April 1-Sept 30</a> 
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. 
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 Muhammad Nami, Former FIRS Chairman
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The Executive Chairman of the FIRS at that time, Muhammad Nami, 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. 
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 <img loading="lazy" decoding="async" width="800" height="400" src="https://technext24.com/wp-content/uploads/2023/08/image-16.png" alt="Multichoice to allow users share DStv streaming accounts" class="wp-image-205737">
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Recall that in 2021, the&nbsp;FIRS<a href="https://nairametrics.com/2021/08/26/tax-evasion-tribunal-orders-multichoice-to-pay-n900-tax-backlog-to-firs/" target="_blank" rel="noreferrer noopener"> issued notices </a>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: <a href="https://technext24.com/2023/04/26/multichoice-nigeria-increase-dstv-gotv/">Multichoice confirms Nigerians will pay more for DStv, GOtv subscription from May 1st</a> 
Nigeria <a href="https://www.premiumtimesng.com/news/headlines/472298-nigerian-govt-accuses-multichoice-of-n1-8-trillion-tax-fraud-moves-to-freeze-accounts.html?tztc=1" target="_blank" rel="noopener">contributes</a> 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.

DStv parent company, MultiChoice reaches $37m tax agreement with Nigeria

Technext.ng

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