MultiChoice faces troubled waters as shares tumble over likely shutdown by Nigerian tax authorities

MultiChoice faces troubled waters as shares tumble over likely shutdown by Nigerian tax authorities

Africa’s leading pay-TV provider, MultiChoice is facing potentially stormy waters after the company’s Johannesburg-listed shares tumbled by close to 8%, following news that the Nigerian Federal Government is considering a freeze of its accounts over unpaid taxes.

The development comes amid allegations of tax evasion which the company has denied.

1st News had reported that Nigeria’s tax authorities, the Federal Inland Revenue Service (FIRS) had directed banks to freeze all accounts in Nigeria; belonging to MultiChoice Nigeria and MultiChoice Africa; until it had been able to recover a reported sum of N1.8 trillion owed in taxes.

The FIRS made this known in a statement issued to newsmen on Thursday, July 8, 2021.

However, MultiChoice, which operates DSTV and GOTV, says it is yet to receive formal notification of the tax issues. Instead, it claimed that it had only learnt of the potential freeze of its account from media reports. Further, it denied owing taxes to Nigeria.

The company made the rebuttal in a terse statement released yesterday.

ALSO READ: FIRS issues memo to banks over freezing of MultiChoice assets due to alleged tax evasion

“We have not received formal notification of this matter. However, shareholders are advised that the Group is aware of reports in the media regarding an ongoing tax matter with the Nigerian Federal Inland Revenue Service.

“The matter is apparently based on unfounded allegations that MultiChoice Nigeria has not fully disclosed all existing subscribers to authorities,” the statement read in part.

Furthermore, MultiChoice expressed the hope that the matter would be resolved amicably.

In addition, the company further revealed in the statement that it has invested significantly in the Nigerian movie industry; fondly described as Nollywood, even as it disclosed that it has also produced content for standalone channels in local Nigerian languages; such as Igbo, Yoruba and Hausa.

MultiChoice

The company says it has contributed over N700bn to the Nigerian economy.

The latest face-off between MultiChoice and the Nigerian government is reminiscent of a similar well-publicised one involving MTN; another South African-based company. The FG had ordered MTN to pay nearly $2billion in alleged unpaid taxes. However, the matter was later resolved after an intense face-off.

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Furthermore, 1st News reports that the development represents another instance of the FG confronting Big Tech.

The FG had suspended the operations of Twitter in Nigeria over what it described as the medium’s undermining of the nation’s sovereignty by promoting instability and acts of terrorism. The move came after a tweet by President Muhammadu Buhari referencing Nigeria’s bloody civil war was taken down.

MultiChoice operates across Africa, with reports monitored by 1st News  in South Africa indicating that the company accounts for over 20 million viewers on its DSTV, Showmax and GOTV platforms.

It is also reported to be, by far, the biggest pay television provider in Africa; a development which a section of the SA media believes makes it a sitting duck for governments; especially those looking to shore up dwindling revenues eroded by the COVID-19 pandemic.

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