MultiChoice Africa Holdings B.V, a South African-headquartered multinational pay-TV provider, has lost a legal battle with Nigeria’s tax authorities over a disputed $342m tax bill.
The company has now been ordered to pay the sum (about N194bn) to the Nigerian government.
The ruling was handed down on Tuesday, October 26, 2021 by the Tax Appeal Tribunal. 1st News reports that MultiChoice had opposed claims by the Federal Inland Revenue Services (FIRS); notably over its tax indebtedness to the Federal Government. However, its appeal was struck out on Tuesday for lack of diligent prosecution, Daily Trust reports.
While delivering judgment on the appeal filed by MultiChoice; the tribunal upheld the preliminary objection of the FIRS against the appeal of Multichoice Africa Holdings B.V. Further, the Tribunal ruled that the firm did not comply with existing tax laws; specifically, Order 3 Rule 6 of the Tax Appeal Tribunal (Procedure) Rules, 2021; which stipulates that an appellant is to deposit half of the assessed amount it is disputing before it can be heard on appeal.
In addition to depositing the sum; the appellant is expected to file along with its appeal an affidavit verifying the payment. The Tribunal stated that MultiChoice equally failed to comply with this procedure. Equally important, the tribunal held that the sum is to be paid as a security for the hearing of any tax appeal.
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It cited the rule which states that; “for an appeal against the tax authority, the aggrieved person will pay 50% of the disputed amount into designated account by the Tribunal before hearing as security for prosecuting the appeal.”
Earlier on June 16, 2021, the FIRS had served a notice of unpaid Value Added Tax (VAT) on Multichoice Africa Holdings B.V. The FIRS claimed that the company had not remitted VAT since inception, a claim it had disputed. Consequently, the company had reportedly challenged the assessment and filed an appeal at the tribunal. But in filing the appeal; MultiChoice failed to comply with provisions of tax laws by failing to make the required deposit as stipulated by the Tribunal Rules.
With the ruling, the FIRS is expected to enforce the payment of the principal sum of $123.7 million; being unpaid VAT by Multichoice Africa Holdings B.V; as well as interest and penalty at $218 million, amounting to over $342 million.
MultiChoice, operators of DSTV, GOTV and ShowMax, is Africa’s biggest pay-TV provider.