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Tax Liabilities: Tribunal Orders Multichoice to Pay Nigerian Govt N900bn

A Tax Appeal Tribunal (TAT) sitting in Lagos has ordered Multichoice Nigeria Limited, owners of cable television services, DSTV and GOTV, to pay 50 percent of a N1.8 trillion tax backlog to the Federal Inland Revenue Service (FIRS).

Abdullahi Ahmad, the Director, Communications and Liaison Department of the FIRS, made this known in a statement in Abuja on Wednesday.

Mr. Ahmad explained that FIRS discovered the backlog through a forensic audit as it showed that Multichoice Nigeria Limited had failed to pay to the Government of Nigeria in past assessment years.

He said the five-member TAT led by its Chairman, A.B. Ahmed, issued the order following an application to it by the Counsel to FIRS.

He stated that the Counsel made the application under Order XI of the TAT Procedure Rules 2010, which requires Multichoice or any other taxpayer who disputes their tax assessments, to make the statutory deposit required under Paragraph 15(7) of the Fifth Schedule to the Federal Inland Revenue Service (Establishment) Act 2007 (FIRS Act).

According to him, these relevant laws are conditions that must be fulfilled before the prosecution of the appeal brought before TAT.

“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.

“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 explained.

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.

“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 percent 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.

The News Agency of Nigeria (NAN) recalls that FIRS had in July announced its plan to engage some commercial banks as agents to freeze and recover N1.8 trillion from accounts of MultiChoice Nigeria Limited (MCN) And MultiChoice Africa (MCA).

The Service said 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”.

Reacting to the order, Multichoice Nigeria Limited said in a statement said the earlier statement by the FIRS is wrong and misleading.

“MultiChoice Nigeria has noted today’s media statement on the Tax Appeal Tribunal (“TAT”) appeal hearing held on 24 August 2021.

“The direction issued by the TAT does not compel MultiChoice Nigeria to make payment of 50 percent of N1,8 Trillion, being half of the disputed tax assessment which is under appeal.

“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%. 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.”

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