FIRS, MultiChoice agree to $37.3m tax settlement out of court
Maureen Aguta
South Africa’s multinational pay-TV company, MultiChoice Group, has announced reaching an agreement to settle out of court with the Nigerian government over tax claims.
MultiChoice had been entangled with the Federal Inland Revenue Service (FIRS) over N1.8 trillion ($1.27 billion) tax claims that led to a lawsuit by the company.
The group said in a statement that the total tax amount of N35.4 billion to be paid by MultiChoice Nigeria and MultiChoice Africa Holdings would be offset against the security deposits and good faith payments made to date.
MultiChoice said in a statement on Thursday that “In terms of the agreement, MultiChoice Nigeria and MultiChoice Africa shall pay a total tax amount of N35.4 billion ($37.3 million), to be offset against the security deposits and good faith payments made to date.”
When contacted, the Public Relations Officer of Multichoice Nigeria, Caroline Oghuma, did not respond to phone calls as of the time of filing this report.
In 2021 The PUNCH reported that the tax agency appointed some commercial banks to recover the sum of N1.8tn following the groups’ continued refusal to grant FIRS access to their servers for audit.
The then FIRS Executive Chairman Muhammad Nami had said, “The level of non-compliance by MultiChoice Africa, the parent company of MultiChoice Nigeria is very alarming. The parent company provides services to MCN and has never paid Value Added Tax since its inception.”
The tax agency also complained that the group persistently breached all agreements and undertakings with the service, “they would not promptly respond to correspondences, they lack data integrity and are not transparent as they continually deny FIRS access to their records.”
MultiChoice later went to court to challenge the penalty imposed by the tax authority for skipping taxes and denying auditors access to its servers.
In March 2022, MultiChoice and FIRS reached a resolution for their tax disputes. As a result, MultiChoice withdrew all ongoing lawsuits, and FIRS conducted a forensic audit to determine the accurate tax liability.
The statement then read in part, “By the broad terms of the agreement, MultiChoice shall withdraw all pending lawsuits towards an amicable resolution of the dispute.