MultiChoice Africa Holdings B.V., the parent company of MultiChoice Nigeria, has vigorously expressed its opposition to the ruling of the Tax Appeal Tribunal on a fiercely disputed $342m Value Added Tax (VAT) bill imposed on it by the Federal Inland Revenue Service (FIRS).
1st News had reported that the tax tribunal had thrown out the company’s appeal; citing lack of diligent prosecution.
The ruling was handed down on Tuesday, October 26, 2021 after MultiChoice had opposed claims by the FIRS; notably over its tax indebtedness to the Federal Government.
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. 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.
But MultiChoice has now opposed the ruling.
In a statement on Wednesday, October 27, 2021; the company said it would lodge an appeal against the ruling at the Federal High Court. Furthermore, the company disclosed that the tribunal ruling was based on a technicality and not on the merits of its case.
“MAH respectfully disagrees with the ruling, which was based on a technicality rather than the merits of the case. Therefore, we will be lodging an appeal at the Federal High Court against the ruling.
“This tax appeal is a separate and distinct matter from the appeal launched by MultiChoice Nigeria in which the TAT found in MCN’s favour last week, allowing it to proceed with that appeal.”
Earlier on June 16, 2021, the FIRS had served a notice of unpaid VAT on MultiChoice Africa Holdings B.V. The FIRS claimed that the company had not remitted VAT since inception, a claim it had disputed. But in August, the FIRS claimed that the tribunal had ordered MultiChoice Nigeria to pay 50% of the N1.8tn; which it claimed to be the amount the company had evaded in tax payments. However, MultiChoice had contested the FIRS’ position; noting that the tax tribunal did not compel it to pay 50% of the N1.8tn tax bill.
Consequently, news broke last week that the company had been cleared to file an appeal at the tribunal against the N900bn tax bill which the FIRS claimed it was indebted to the Nigerian government for.
MultiChoice, operators of DSTV, GOTV and ShowMax, is Africa’s biggest pay-TV provider.