The Federal Government of Nigeria through its Tax Agency, Federal Inland Revenue Service, FIRS, has obtained a court injunction ordering MultiChoice Nigeria Limited to pay 50 per cent of the disputed N1.8 trillion tax.
In a statement issued yesterday by FIRS spokesman, Abdullahi Ahmad, he said that a Tax Appeal Tribunal, TAT, sitting in Lagos gave the injunction ordering MultiChoice Nigeria Limited to pay the sum to his agency.
In July, the FIRS appointed some commercial banks as agents to recover N1.8 trillion from the accounts of MultiChoice Nigeria Limited, MCN, and MultiChoice Africa, MCA.
The FIRS Boss, Muhammad Nami, said that the decision to appoint the banks as agents, and to freeze the accounts was a result of the continued refusal of MultiChoice to grant FIRS access to its servers for audit.
Multichoice owns the two entertaining satellite televisions, DStv and Gotv, which are the most popular subscription platforms in Nigeria
At the resumption of hearing yesterday, the five-member Tax Appeal Tribunal, led by A.B. Ahmed, issued the order, based on the application brought to the tribunal by FIRS.
The application read: “The counsel to FIRS made the application under Order XI of the TAT Procedure Rules 2010 which requires Multichoice or any other taxpayer who disputes their tax assessments, to make the statutory deposit required under Paragraph 15(7) of the Fifth Schedule to the Federal Inland Revenue Service (Establishment) Act 2007 (FIRS Act) as a condition that must be fulfilled before the prosecution of the appeal brought before TAT.
“In certain defined circumstances to which the Multichoice appeal fits, Paragraph 15(7) of the Fifth Schedule to the Federal Inland Revenue Service (Establishment) Act 2007 (FIRS Act) requires persons or companies seeking to contest a tax assessment to pay all or a stipulated percentage of the tax assessed before they can be allowed to argue their appeal contesting the assessment at TAT.”
The FIRS stated that Multichoice filed a suit at the Lagos TAT, following its dispute over the agency’s issuance of notices of assessment and demand note in the sum of N1, 822, 923,909,313.94k on April 7, 2021.
Reacting to the injunction, MultiChoice said that MultiChoice Nigeria has noted the media statement on the Tax Appeal Tribunal (“TAT”) appeal hearing held on August 24,2021.
MultiChoice further said that the directive issued by the TAT does not compel MultiChoice Nigeria to make payment of 50 per cent of N1,8 trillion, being half of the disputed tax assessment which is under appeal.
Rather, the directive was in accordance with paragraph 15(7) of the Fifth Schedule to the FIRS Establishment Act and requires MultiChoice Nigeria to deposit with FIRS an amount equal to the tax paid by MultiChoice Nigeria in the preceding year of assessment OR one half of the disputed tax assessment under appeal, whichever is the lesser amount plus 10%.
“The lesser amount is the tax paid by MultiChoice Nigeria in the previous assessed year which is substantially less than the disputed assessment.
“MultiChoice Nigeria is a law-abiding corporate citizen and continues to engage constructively with FIRS in an attempt to resolve this matter,” MultiChoice stated.