MultiChoice to pay FIRS $37.3m as tax settlement

Bisola David
Bisola David
MultiChoice to pay FIRS $37.3m as tax settlement

The largest pay TV company in Africa, MultiChoice Group, announced on Thursday that a tax issue involving one of its subsidiary companies and Nigerian tax authorities had been resolved.

A tax payment of approximately $37.3 million is required as part of the settlement.

Recall that in 2022, MultiChoice Nigeria’s accounts were frozen by the Federal Inland Revenue Service of Nigeria.

Furthermore, MultiChoice Group received a tax claim for its operations in Nigeria totaling 1.8 trillion naira ($1.27 billion), in addition to a separate $342 million claim for value-added taxes.

The group did, however, announce that the security deposits and good faith payments made thus far will be used to offset MultiChoice Nigeria and MultiChoice Africa Holdings’ combine tax liability of 35.4 billion naira.

The Federal Inland Revenue Service and MultiChoice Nigeria reached an agreement to resolve their outstanding tax disputes outside of court in March 2022, pertaining to a tax settlement of $4.4 billion.

Following this, the Federal Inland Revenue Service consented to carry out a forensic analysis of MultiChoice’s financial records in order to ascertain the firm’s tax liability, and the South African company subsequently withdrawn all ongoing legal actions.

In 2021, MultiChoice filed a lawsuit to contest the tax authority’s penalty, claiming that the DSTV service owner had neglected to pay taxes and had barred auditors from accessing its servers.

According to a part of the statement, “By the broad terms of the agreement, MultiChoice shall withdraw all pending lawsuits towards an amicable resolution of the dispute.

“Also, as part of the agreement, the FIRS commenced a forensic systems audit of MultiChoice accounts on Tuesday, 8 March, 2022 to determine the tax liability of the Company.”

The FIRS published Notices of Assessment and Demand Notices for MultiChoice totaling N1.8 trillion back in April 2021.

In an attempt to challenge the assessments, MultiChoice filed an appeal with the Tax Appeal Tribunal, which sparked a string of proceedings before the TAT and the Federal High Court.

August saw the FIRS announcing that Multichoice had been ordered by a TAT court in Lagos to pay half of the N1.8 trillion which it had determined to be the amount the company hasn’t made in tax payments.

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