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Multichoice Kicks As Tribunal Orders Payment Of N900bn To Nigerian Government For Tax Evasion

*The Tax Appeal Tribunal (TAT), in Lagos, has directed Multichoice Nigeria to deposit with the Federal Inland Revenue Service 50 percent of the amount of the tax assessment under appeal as security and a condition before the prosecution of the appeal brought before it

*Firm says TAT’s order does not compel MultiChoice Nigeria to make payment of the stated amount

Isola Moses | ConsumerConnect

For apparently evading tax while avoiding taking responsibility for several months in the West African country, the Tax Appeal Tribunal (TAT), sitting in Lagos, Wednesday, August 25, 2021, ordered Multichoice Nigeria Limited (DSTV), to pay 50 percent of N1.8 trillion ($4.38 billion).

However, following the Tax Appeal Tribunal’s directive to the company to pay the tax bill relating to previous years, Multichoice has kicked, countering the order.

The company in statement Wednesday contended that the order issued by TAT does not compel MultiChoice Nigeria to make payment of the stated amount, being half of the disputed tax assessment which is under appeal.

The firm stated: “The direction issued by the TAT in accordance with paragraph 15(7) of the Fifth Schedule to the FIRS Establishment Act requires MultiChoice Nigeria to deposit with FIRS an amount equal to the tax paid by MultiChoice Nigeria in the preceding year of assessment OR one half of the disputed tax assessment under appeal, whichever is the lesser amount plus 10%.

According to the company, the lesser amount is the tax paid by MultiChoice Nigeria in the previous assessed year, which is substantially less than the disputed assessment.

“Multichoice Nigeria is a law-abiding corporate citizen and continues to engage constructively with FIRS in an attempt to resolve this matter,” said the statement.

ConsumerConnect had reported the Federal Inland Revenue Service (FIRS) determined the company’s tax arrears through a forensic audit to be the amount in taxes that the pay TV firm had failed to pay to the Federal Government in past assessment years.

Fifty percent of the backlog is N900 billion.

Nigerian Tax Appeal Tribunal’s ruling

The five-member TAT, led by its Chairman, Prof. A.B. Ahmed, issued the order following an application to it by the counsel to FIRS.

The FIRS Counsel made the application under Order XI of the TAT Procedure Rules 2010 which enables a party to make an application at any stage of the proceedings.

Counsel for FIRS drew the attention of the Tribunal to Paragraph 15(7) of the Fifth Schedule to the Federal Inland Revenue Service (Establishment) Act 2007 and urge the tribunal to direct Multichoice to deposit with the FIRS 50 percent of the amount of the assessment under appeal as security and a condition that must be fulfilled before the prosecution of the appeal brought before the tribunal.

Multichoice Nigeria, which is a division of a South African group, provides DSTV and GOTV, cable TV products that are popular in Nigeria.

Recall Multichoice had filed the matter at the Lagos TAT, following its dispute over FIRS’ issuance of Notices of Assessment and Demand Note in the sum of N1.82 trillion April 7 this year.

The amount constitutes what the FIRS calculated as due in taxation to the Federal Government from the South African company after an investigation over several months to determine the extent to which Multichoice had been evading taxes in its country of operations, Nigeria.

The details of the development were contained in a statement issued Wednesday, August 25, 2021, by Dr. Abdullahi Ismaila Ahmad, Director of Communications and Liaison Department at FIRS.

The tax regulator stated that in certain defined circumstances to which the Multichoice appeal fits, Paragraph 15(7) of the Fifth Schedule to the Federal Inland Revenue Service (Establishment) Act 2007 (FIRS Act) 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 statement further noted at the Tuesday’s hearing of the matter in Appeal No: TAT/LZ/CIT/062/2021 19/08/2021 (Multichoice Nigeria Limited v. Federal Inland Revenue Service), Multichoice had 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 and prayer before the TAT directing 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.

In response, however, the FIRS counsel asked TAT to issue an order requiring that Multichoice makes the statutory deposit of 50 percent of the disputed sum.

IT was gathered that following hearing arguments from both sides, TAT upheld the FIRS submission and directed Multichoice to deposit with the FIRS an amount equals 50 percent of the Assessment under the Appeal plus a sum equal to 10 percent of the said deposit as a condition precedent for further hearing of the appeal.

TAT has adjourned the appeal to September 23, 2021, for report of compliance with its order and continuation of the hearing, subject to compliance with the Tribunal’s order.

Multichoice is said to be the latest South African group with a significant presence in Nigeria to face a multi-billion Dollar tax demand from the country.

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