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MultiChoice Pays $37 Million to Nigeria tax authorities for Tax Settlement
MultiChoice Nigeria and its mother company, MultiChoice Group Holdings, have reached an agreement with Nigeria’s Federal Inland Revenue Service (FIRS). This agreement was signed to settle a tax dispute that has been going on for over two years. The settlement involves a payment of $37.3 million.
FIRS Issued A Hefty Tax Claim On Multichoice
It all started when the FIRS froze MultiChoice Nigeria’s accounts back in 2022 and issued a hefty tax claim of ₦1.8 trillion ($4.4 billion) for their Nigerian operations.
On top of that, there was an additional claim of $342 million for value-added taxes.
According to a report by Reuters, MultiChoice Group, the parent company, disclosed this information. They mentioned that the subsidiaries will pay a total tax amount of N35.4 billion, which will be offset against the security deposits and good faith payments made so far.
It seems like quite a tax journey for MultiChoice, but it looks like they’ve found a resolution.
Tax Fraud Filed Against Multichoice
In 2022, the FIRS (that’s the Federal Inland Revenue Service) asked the banks to freeze MultiChoice Nigeria’s accounts.
They also hit the parent company, MultiChoice Group, with a whopping N1.8 trillion tax claim, which is about $1.27 billion for their operations in Nigeria.
On top of that, there was an additional claim of $342 million for value-added taxes.
In MultiChoice’s 2023 financial statements, they mentioned that they had two ongoing tax matters with the FIRS. They expressed their intention to bring these tax audit processes to a fair conclusion with the Nigerian authority.
They even reached an agreement with the FIRS on February 16, 2022, to put a pause on legal proceedings and start an integrated tax audit for both entities. It seems like MultiChoice is determined to work things out and find a fair resolution with the tax authorities.
The statement further read, “The audit process, which covers corporate income tax, value-added tax, and transfer pricing, is ongoing but has been taking longer than anticipated.
As part of the process, the group has made a further ZAR0.6bn in tax security deposits during FY23 on a without-prejudice and good-faith basis.
The total deposit balance now amounts to ZAR1.3bn. These have been recorded as current receivables pending the outcome of the audit process.”
Conclusion
So, under President Bola Tinubu’s administration, they’ve kicked off a reform to take a closer look at Nigeria’s tax system.
The goal is to address the issues of tax avoidance, evasion, and incentives that cost the country a whopping N26 trillion every year.
It’s definitely a big move to tackle the losses and ensure a fair and effective tax regime for the nation.
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