MultiChoice can appeal Nigerian tax claim

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Nigeria’s tax authority has hit MultiChoice with a massive Naira 1.8 trillion (€3.8bn) tax claim. The sum is argued by MultiChoice to be larger than its revenues from Nigeria and certainly dwarfs the company’s market capitalisation.

MultiChoice has now been allowed to appeal the tax charge in front of Nigeria’s Tax Appeal Tribunal. It has paid into the court a statutory $19.4 million interim deposit to allow the appeal to proceed even though Nigeria’s Federal Inland Revenue Service (FIRS) wanted $2.2 billion to be paid up front (half the claimed overall amount).

MultiChoice stated that it had complied with the 50 per cent ruling, and argued that the referenced section of the FIRS Act did not compel it to pay N900 billion but an amount equal to its tax in the preceding year of assessment or one half of the disputed tax assessment under appeal, whichever is the lesser amount plus 10 per cent.  MultiChoice also argued that the FIRS affidavit was arbitrary and contrived.

The Tribunal agreed, and adjourned the appeal hearing until November 17th. The Tribunal ruled: “It is obvious that the appellant has not only complied with the orders of this court but has also provided sufficient evidence before this tribunal that they are credible and ready to pursue this matter with all sense of responsibility and seriousness. It is only fair and just that they are given the privilege to do so.”

However, not helping matters is the general allegation of deliberate “tax fraud” made by FIRS against the various trading businesses under the MultiChoice umbrella including DStv, GOtv and its SVoD service Showmax, with further allegations that MultiChoice had avoided its tax liabilities for the past 10 years.

FIRS is alleging in its claim before the court that it had discovered that the companies have persistently breached all agreements and undertakings with the Service. They did not promptly respond to correspondences and lacked data integrity and transparency. FIRS also added that the group’s performance did not reflect in their tax obligations and compliance level in the country.


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