FIRS goes after MultiChoice over N1.8tr tax liability

From Uche Usim, Abuja

The Federal Inland Revenue Service (FIRS) is going all out to recover outstanding N1.8 trillion tax liability from the accounts of Messrs MultiChoice Nigeria Limited (MCN) And MultiChoice Africa (MCA). 

To this end, the Service has appointed some commercial banks to recover the debt directly from the companies’ accounts.

A statement signed by the Executive Chairman FIRS, Muhammad Nami, noted that the decision to appoint the banks as agents and to freeze the accounts was as a result of the Group’s continued refusal to grant FIRS access to its servers for audit. 

“It was discovered that the companies persistently breached all agreements and undertakings with the Service, they would not promptly respond to correspondences, they lack data integrity and are not transparent as they continually deny FIRS access to their records. Particularly, MCN has avoided giving the FIRS accurate information on the number of its subscribers and income. The companies are involved in the under-remittance of taxes which necessitated a critical review of the tax-compliance level of the company,” he explained.

Nami added that the group’s performance does not reflect in its tax obligations and compliance level in Nigeria. 

“The level of non-compliance by MultiChoice Africa (MCA), the parent Company of MultiChoice Nigeria (MCN) is very alarming. The parent company, which provides services to MCN has never paid Value Added Tax (VAT) since its inception.

The issue with Tax collection in Nigeria, especially from foreign-based companies conducting businesses in Nigeria and making massive profits is frustrating and infuriating to the Federal Inland Revenue Service (FIRS). Regrettably, companies come into Nigeria just to infringe on our tax laws by indulging in tax evasion. There is no doubt that broadcasting, telecommunications and the cable-satellite industries have changed the face of communication in Nigeria. However, when it comes to tax compliance, some companies are found wanting. They do with impunity in Nigeria what they dare not try in their countries of origin”, he added.

Nami further emphasized that Nigeria contributes 34 percent of total revenue for the MultiChoice Group, followed by Kenya with 11 percent, and Zambia in 3rd place with 10 percent. The rest of Africa, where they have presence, account for 45 percent of the group’s total revenue. 

“Information currently at the disposal of FIRS has revealed a tax liability for relevant years of assessment at N1,822,923,909,313.94 and $342,531,206.  

“Under FIRS powers in Section 49 of the Companies Income Tax Act Cap C21 LFN 2004 as amended, Section 41 of the Value Added Tax Act Cap V1 LFN 2004 as amended and Section 31 of the FIRS (Establishment) Act No. 13 of 2007, all bankers to MCA & MCN in Nigeria were therefore appointed as Collecting Agents for the full recovery of the aforesaid tax debt. 

“In this regard, the affected banks are required to sweep balances in each of the above-mentioned entities’ accounts and pay the same in full or part settlement of the companies’ respective tax debts until full recovery. This should be done before the execution of any transaction involving the companies or any of their subsidiaries.

Meanwhile, MultiChoice Nigeria in a terse statement yesterday, said it has not received any notification from FIRS in respect of the said assessment.  It however added that it respects and is comfortable that it complies with the tax laws of Nigeria.

“We have been and are currently in discussion with FIRS regarding their concerns and believe that we will be able to resolve the matter amicably,” The Company stated.