Tax dispute: MultiChoice agrees to pay N35bn to FIRS

MultiChoice Group has agreed to pay N35.4 billion as part of its tax obligations to the Federal Inland Revenue Service (FIRS).

Multichoice owns the satellite television services, DStv and GOtv — popular subscription-based platforms in Nigeria.

In a statement to shareholders on Thursday, the firm said the payment is to offset against “security deposits”.

“Shareholders are advised that MultiChoice has reached a settlement with the FIRS in Nigeria in relation to the tax assessments raised in April 2021 on MultiChoice Nigeria (MCN) and in June 2021 on MultiChoice Africa Holdings BV (MAH),” the company said.

“The parties (FIRS, MCN and MAH) concluded a ‘without prejudice or precedent’ agreement in full and final settlement of all matters in dispute. In terms of the agreement, MCN and MAH shall pay a total tax amount of NGN35.4bn (~US$37.3m), to be offset against the security deposits and good faith payments made to date.”

In 2021, FIRS issued notices of assessment and demand notices in the sum of N1.82 trillion as tax bills.

The agency appointed some commercial banks as agents to recover the amount.

However, MultiChoice disputed the assessments and approached the tax appeal tribunal (TAT), which led to a series of cases at both the TAT and the federal high court.

Multichoice further instituted a court action on August  25, 2021, challenging the assessment of FIRS over unpaid value-added tax (VAT) amounting to $342 million. 

Seven months after the challenge, FIRS and MultiChoice Nigeria agreed to an amicable resolution over pending tax disputes.

As part of the agreements, MultiChoice was to withdraw all pending lawsuits, while FIRS was to conduct a forensic system of the company’s accounts.