Tax Dispute: MultiChoice, FIRS Settle For $37.3m Payment

After years of dispute, MultiChoice Group (MCGJ.J), Africa’s largest pay TV conglomerate and the Nigeria’s Federal Inland Revenue Service (FIRS) have settled for $37.3 million tax payment.

Recall that in April 2021, the FIRS issued notices of Assessment and Demand Notices in the sum of N1.8 trillion ($1.27 billion) on MultiChoice for its operations in Nigeria, along with a separate claim of $342 million for value-added taxes (VATs).

MultiChoice, which disputed the assessments, approached the Tax Appeal Tribunal (TAT), leading to a series of cases at both the TAT and the Federal High Court.

The FIRS later announced that a TAT court sitting in Lagos has ordered Multichoice to pay 50 per cent of the N1.8 trillion, which it had determined to be the amount the company hasn’t made in tax payments.

In 2022, FIRS took action by freezing MultiChoice Nigeria’s accounts. Additionally, MultiChoice Group was issued a tax claim totalling $1.27 billion for its operations in Nigeria, along with a separate claim of $342 million for value-added taxes.

Subsequently, the South African company withdrew all pending lawsuits and the FIRS agreed to conduct a forensic audit of MultiChoice’s accounts to determine the company’s tax liability.

However, the group announced that the combined tax liability of N35.4 billion owed by MultiChoice Nigeria and MultiChoice Africa Holdings will be deducted from the security deposits and good faith payments made thus far. However, both parties agreed to an amicable resolution of their issues.

In a statement released on Thursday, MultiChoice Group announced that its subsidiary entities have settled the tax dispute with Nigerian tax authorities. The settlement entails a total tax payment of about $37.3 million.

The statement reads: “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.”