MultiChoice Africa heads to court as tribunal strikes out appeal over $342m VAT dispute

The tax appeal tribunal (TAT) has struck out an appeal instituted by MultiChoice Africa B.V Holdings where it challenged the assessment of the Federal Inland Revenue Service (FIRS) over unpaid value-added tax (VAT) amounting to $342 million.

MultiChoice Africa is the parent company of MultiChoice Nigeria Limited, owner of DStv and Gotv.

The VAT allegation is different from the ‘tax evasion’ dispute against MultiChoice Nigeria Limited — which is still at the Lagos tribunal.

Mohammed Nami, FIRS chairman, had alleged that MultiChoice Africa, which provides services to its Nigerian arm, has never paid VAT.

Nami had put the figure at $342.5 million.

“Information currently at the disposal of FIRS has revealed a tax liability for relevant years of assessment for N1.82 trillion and $342.5 million,” he had said.

The tribunal, while delivering its judgment on Tuesday, upheld the preliminary objection of the FIRS against the appeal of MultiChoice Africa.

The judgment document sighted by TheCable, A.B Ahmed, chairman of the tribunal, said the appeal is incompetent since the appellant did not conform with the provisions of Order III, Rule 6 of the Tax Appeal Tribunal (Procedure) rules, 2021.

The rule 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 which the company also failed to comply with.

According to the tribunal, the sum is to be paid as a security for the hearing of any tax appeal.

“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”.

In a statement on Wednesday, MultChoice Africa rejected the ruling of the tribunal.

The company said it would lodge an appeal against the ruling at the Federal High Court, adding that the TAT ruling was based on technicality rather than the merits of the 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,” the statement reads.

“This tax appeal is a separate and distinct matter from the appeal launched by MultiChoice Nigeria (MCN), in which the TAT found in MCN’s favour last week, allowing it to proceed with that appeal.”

The FIRS had served a notice of assessment of unpaid VAT to MultiChoice Africa on June 16, 2021, but the company challenged the assessment and filed an appeal at the tribunal.

It, however, failed to make the required deposit as stipulated by the tribunal rules.