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Nigeria, Multichoice in $5.5- billion tax dispute


NIGERIA’S revenue service has told banks to freeze the accounts of units of pay-TV group MultiChoice to recover $4.4 billion, in the latest tax dispute between a South African-based company and Nigerian authorities.

Nigeria’s Federal Inland Revenue Service (FIRS) said it had instructed banks to freeze the accounts of MultiChoice Africa and its Nigerian subsidiary for breaching agreements and denying access to records for auditing.

Shares in MultiChoice, which denied the accusations and said the issue could be resolved amicably, fell more than 5% in Johannesburg.

The case follows another dispute in 2018 involving South African mobile operator MTN Group whose Nigerian unit was ordered to pay $2 billion in taxes relating to imports and other payments from 2007 to 2017. The demand was later dropped.

FIRS said in a statement it had appointed commercial banks and agents to recover 1.8 trillion naira ($4.38 billion) from MutliChoice Africa and MultiChoice Nigeria.

“It was discovered that the companies persistently breached all agreements and undertakings with the Service, they would not promptly respond to correspondences, they lacked data integrity and are not transparent as they continually deny FIRS access to their records,” FIRS said.

“The companies are involved in the under-remittance of taxes which necessitated a critical review of the tax-compliance level of the company,” it said.

Nigeria, with one of the lowest tax collection rates in the world, has been seeking to boost non-oil tax receipts to support its struggling economy and cut its budget deficit.

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MultiChoice said it had not been formally notified about the matter but said the case appeared to be based on “unfounded allegations” that MultiChoice Nigeria had not fully disclosed all its existing subscribers to the authorities.

“We have engaged openly with FIRS and the engagements are ongoing in a transparent and constructive manner,” it said, adding that it believed the issue could be amicably resolved.

It said its operations in Nigeria were continuing.

MultiChoice Group, spun off in 2019 from Naspers, makes a third of its revenues from its business elsewhere on the continent outside South Africa. Nigeria is its biggest market in that segment, the company said in its annual report.

By The African Mirror