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PayTV firm, Multichoice to pay Nigeria $37.3m as tax

By Stanley Iwuoha

South Africa pay TV company, MultiChoice Group, says its Nigerian subsidiary has reached a settlement with the Federal Government via the Federal Inland Revenue Service and agreed to pay a total tax amount of about $37.3m.

Recall that the Federal Inland Revenue Service, FIRS had frozen MultiChoice Nigeria’s accounts in 2022 and served MultiChoice Group with a N1.8tn ($1.27bn) tax claim for its Nigeria operation and a $342m claim for value-added taxes.

In a statement released by the group yesterday, it said that the total tax amount of N35.4bn 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 is the owner of the satellite television, DSTV, a popular subscription-based platform in Nigeria.

MultiChoice said, “In terms of the agreement, MultiChoice Nigeria and MultiChoice Africa shall pay a total tax amount of N35.4bn ($37.3m), to be offset against the security deposits and good faith payments made to date”.

In 2021 the FIRS had 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 level of non-compliance by MultiChoice Africa, the parent Company of MultiChoice Nigeria is very alarming. The parent company, which provides services to MCN, has never paid Value Added Tax since its inception,” said the FIRS Executive Chairman Muhammad Nami.

The tax agency also complained that the Pay TV company had 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,” he said.

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.

“Also, as part of the agreement, the FIRS commenced a forensic systems audit of MultiChoice accounts on Tuesday, 8 March, 2022 to determine the tax liability of the Company.”

Nigeria is said to be contributing approximately 34 per cent of the MultiChoice group’s total revenue, followed by Kenya at 11 per cent, and Zambia in third place with around 10 per cent.

The remaining African countries where the group operates contribute about 45 per cent to the total revenue, according to the group’s report.

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