Multichoice Loses N1.8 trn Tax Case Against FG

By Fola James

Multichoice, owners of Nigeria’s biggest television cable service provider must go ahead to pay the federal government a whopping N900 billion as tax backlog.

This is contained in a ruling by the Tax Appeal Tribunal sitting in Lagos, on Tuesday, according to the News Agency of Nigeria, NAN. The sum amounted to 50 per cent of N1.8 trillion the Federal Inland Revenue Service, FIRS earlier claimed as tax backlog from the entertainment service provider.

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

Ahmad explained that FIRS discovered the backlog through a forensic audit, as it allegedly showed that Multichoice Nigeria Limited had failed to pay to the federal government in past assessment years.

He said the five-member Tribunal, led by its chairman, Prof. 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 Tribunal 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 the Tribunal.

“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.

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.

“In response, the FIRS counsel asked TAT to issue an order requiring that Multichoice make the statutory deposit of 50 per cent of the disputed sum.

“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 FIRS had, in July, announced its plan to engage some commercial banks as agents to freeze and recover N1.8trn from accounts of Messrs MultiChoice Nigeria Limited (MCN) And MultiChoice Africa (MCA).