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MultiChoice to withdraw lawsuits against FIRS, settle $4.4bn tax obligation

*The issue with tax collection in Nigeria, especially from foreign-based companies conducting businesses in Nigeria and making massive profit is frustrating and infuriating to the tax regulator, says Federal Inland Revenue Service

Isola Moses | ConsumerConnect

The Federal Inland Revenue Service (FIRS) and MultiChoice Group Limited, Africa’s biggest pay-TV provider, have agreed to an out-of-court settlement on the latter’s $4.4billion tax obligation.

ConsumerConnect reports the South African-owned company in a statement to the Executive Chairman FIRS, noted with regard to the term of the deal with FIRS, it will withdraw lawsuits while the Nigerian tax administration regulator, will conduct a forensic audit of MultiChoice’s accounts to determine its actual tax liability.

Recall that MultiChoice went to court 2021 to challenge the penalty imposed by the tax authority, which said the owner of the DSTV and GOTV services evaded taxes and denied auditors’ access to its servers at the time.

Likewise, FIRS had engaged some commercial banks as agents to freeze and recover N1.8 trillion from accounts of MultiChoice Nigeria Limited and MultiChoice Africa respectively.

The FIRS also had 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.

The service said it also discovered that the companies persistently breached all agreements and undertakings with the Service.

The Service had stated: “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.

“Particularly, MCN has avoided giving the FIRS accurate information on the number of its subscribers and income.

“The companies are involved in the under-remittance of taxes which necessitated a critical review of the tax-compliance level of the company.”

The Nigerian tax authority further noted that the pay TV business group’s “performance did not reflect in their tax obligations and compliance level in the country.’’

The level of non-compliance by Multi-Choice Africa (MCA), the parent Company MCN was very alarming adding that the parent company, which provided services to MCN had never paid Value Added Tax (VAT) since its inception, said FIRS.

The regulator further said: “The issue with tax collection in Nigeria, especially from foreign-based companies conducting businesses in Nigeria and making massive profit is frustrating and infuriating to the FIRS.

“Regrettably, companies come into Nigeria just to infringe on our tax laws by indulging in tax evasion.

“There is no doubt that broadcasting, telecommunications and the cable-satellite industries have changed the face of communication in Nigeria.’’

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