Multichoice ordered to pay N900 billion tax backlog
The order is pending the final determination of an appeal filed by Multichoice before the tax tribunal.
Multichoice Nigeria Limited has been ordered to pay N900 billion, 50 per cent of N1.8 trillion tax backlog, to the Federal Inland Revenue Service (FIRS) in line with extant tax laws.
FIRS spokesman Abdullahi Ahmad via on Wednesday in Abuja said a Tax Appeal Tribunal (TAT) sitting in Lagos gave the order.
The order is pending the final determination of an appeal filed by Multichoice before the tribunal.
“In certain defined circumstances to which the Multichoice appeal fits, paragraph 15(7) of the fifth schedule to the FIRS (Establishment) Act 2007 requires persons or companies seeking to contest a tax assessment to pay all or a stipulated percentage of the tax assessed before they can be allowed to argue their appeal contesting the assessment at TAT,” the spokesman explained.
“Multichoice Nigeria Limited filed the matter at the Lagos TAT following its dispute over FIRS’ issuance of Notices of Assessment and Demand Note in the sum of N1,822,923,909,313.94k on 7 April 2021.
“The amount constitutes what the FIRS calculated as due in taxation to the Federal Government of Nigeria from Multichoice after an investigation over several months to determine the extent to which Multichoice has been evading taxes in Nigeria,” he added.
Mr Ahmad explained that FIRS discovered the backlog through a forensic audit as it showed that the cable television, DSTV, providers had failed to pay to the Nigerian government in past assessment years.
The five-member TAT led by its Chairman, Professor A.B. Ahmed, issued the order following an application to it by the Counsel to FIRS, the spokesman said.
Mr Ahmad noted that at Tuesday’s hearing of the matter in Appeal, Multichoice Nigeria Limited amended its Notice of Appeal and thereafter sought through its Counsel, Bidemi Olumide of AO2 Law Firm, for an adjournment of the proceedings to enable it to respond to the FIRS’ formal application for accelerated hearing of the appeal.
“In response, the FIRS Counsel asked TAT to issue an order requiring that Multichoice makes the statutory deposit of 50 per cent of the disputed sum.
“The counsel also prayed TAT to direct Multichoice to produce before the Tribunal the integrated Annual Report and Management Account Statements of Multichoice Group Ltd for Tax Years 2012 to 2020, among other prayers.
“After hearing arguments from both sides, TAT upheld the FIRS Act and directed Multichoice Nigeria Limited to deposit with the FIRS the amount prescribed by the law, which is an amount equal to the tax charged upon Multichoice in the preceding year of assessment.
“Or one half of the tax charged by the assessment under appeal (whichever is lesser), plus a sum equal to 10 per cent of the said deposit as a condition precedent for further hearing of the Appeal.
“Thereafter, TAT adjourned the Appeal to September 23, 2021 for the continuation of the hearing, subject to compliance with the Tribunal’s order,” he said.
FIRS had in July announced its plan to engage some commercial banks as agents to freeze and recover N1.8 trillion from accounts of Messrs MultiChoice Nigeria Limited (MCN) And MultiChoice Africa (MCA).
The tax body explained that the decision to appoint the banks as agents and to freeze the accounts was as a result of the groups’ continued refusal to grant FIRS access to their servers for audit and it discovered that the companies persistently breached all agreements and undertakings with FIRS.