MultiChoice Nigeria Finally Settles With FG as It Offset $37.3 Million Total Tax

MultiChoice Group has announced that its Nigerian subsidiary has agreed with the Federal Government of Nigeria through the Federal Inland Revenue Service to pay a total tax of about $37.3 million. 

The MultiChoice account was frozen by FIRS in 2022 and served the 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, the group disclosed 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 reasonable faith payments made to date.

MultiChoice, in a statement on Thursday, 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.

It was reported in 2021 that the FIRS selected some commercial banks to recover the sum of N1.8tn following the groups' continued refusal to grant FIRS access to their servers for audit.

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The Chairman during this time, Mr Muhammad Nami, said,

• 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.

FIRS complained that the group continually 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."

MultiChoice later went to court to challenge the penalty imposed by the tax authority for skipping taxes and denying auditors access to its servers.

As of March 2022, MultiChoice and FIRS resolved 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 Company's tax liability.

MultiChoice owns the satellite television, DSTV, a popular subscription-based platform in Nigeria.

Approximately 34% of the MultiChoice group's total revenue comes from Nigeria, followed by Kenya at 11%, and Zambia in third place with around 10%.

According to the group's report, the remaining African countries where the group operates contribute about 45% to the total revenue.