MultiChoice Group, Africa’s largest cable TV company, said that its Nigerian subsidiary has agreed to pay the Federal Inland Revenue Service about $37.3 million as part of a tax settlement.
In Nigeria, DSTV is a famous subscription-based satellite TV service owned by MultiChoice.
As agreed, MultiChoice Nigeria and MultiChoice Africa will pay N35.4bn ($37.3m) in taxes. It will be used to offset the security deposits and good-faith payments already made.
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FIRS banned MultiChoice.
It comes after FIRS decided to freeze MultiChoice Nigeria’s accounts in 2022 after sending the group a tax claim for N1.8tn ($1.27bn) for its operations in Nigeria and a value-added tax claim for $342m.
In 2021, the tax agency hired commercial banks to get back N1.8tn because the group refused to let FIRS audit their computers.
Muhammad Nami, then-FIRS Executive Chairman, observed, “MultiChoice Africa, the parent company of MultiChoice Nigeria, is very alarming in its non-compliance. The parent firm that serves MCN has never paid VAT since its founding.”
The tax agency also stated that the group violated all Service agreements and promises, “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 sued the tax authority.
MultiChoice later went to court to fight the tax authority’s fine for not paying its taxes and not letting inspectors into its servers.
Their tax disagreements were settled in March 2022 between MultiChoice and FIRS. MultiChoice dropped all of its cases as a result, and FIRS did a forensic audit to find out the correct amount of tax due.
“By the broad terms of the agreement, MultiChoice shall withdraw all pending lawsuits to reach a peaceful resolution,” the statement said.
FIRS started a forensic systems audit of MultiChoice accounts on Tuesday, March 8, 2022, as part of the deal to determine how much tax the Company owed.
Nigeria brings in about 34% of the MultiChoice group’s total income. Kenya comes in second with 11%, and Zambia comes in third with 10%.
The group’s report says that the income from the remaining African countries where it does business makes up about 45 per cent of the total.