Multichoice, the parent company of cable providers DSTV and GOTV, has been ordered to pay the sum of N900 billion to the Federal Inland Revenue Service (FIRS) by the Tax Appeal Tribunal (TAT). The company was accused of gross tax evasion that totaled into the sum of N1.8 trillion naira and was demanded to pay 50 percent (N900 billion) or $2.1b f the total sum it owed. The company was also given an ultimatum of September 23rd to pay 50 percent of the tax it owed.
FIRS spokesperson – Abdullahi Ismaila Ahmad made the revelation about the matter. According to him, apart from being ordered to pay 50 percent of the tax Multichoice owed, it was to pay an additional 10 percent of the deposit of 900 billion. The 90 million (10 percent) would serve as a condition precedent for another hearing of the appeal.
Tax evasion is a big problem for governments and for countries that are still developing like Nigeria, it is quite a dilemma. The Government relies majorly on taxes for funding of federal and other projects and when they do not come, a lot of things suffer.
The FIRS spoke about Multichoice’s tax evasion last month in July and directed commercial banks in the country to freeze and recover the sum of N1.8 trillion from Multichoice under the company names Multichoice Nigeria Limited (MCN) and Multichoice Africa (MCA). The FIRS said that the company has breached all agreements and undertakings that it had made with the FIRS. The FIRS also claims that Multichoice, after refusing to reach agreements, refused to grant the service access into its service to perform an audit.
Multichoice in response says that it has been acting transparently towards the FIRS and that its allegations were rather bottomless. “The matter is apparently based on unfounded allegations that Multichoice Nigeria has not fully disclosed all existing subscribers to authorities”, Multichoice said emphasizing that the matter would be resolved amicably. These claims were, however, not listened to by the Tax Appeal Tribunal. The Tax Appeal Tribunal ordered the company to pay half of what the FIRS said it owes before the appeal can be continued. According to the Chairman of the tribunal, the order that Multichoice pays half of what the FIRS says it owes following Paragraph 15(7) of the Fifth Schedule to the FIRS Act (2007), and according to the Act, Multichoice, or any other taxpayer who disputes their tax assessments must make the statutory deposit as a condition that must be fulfilled before the prosecution of the appeal brought before TAT.