The MultiChoice’s limited Choices on $4.5 Billion Tax Burden in Nigeria

The MultiChoice’s limited Choices on $4.5 Billion Tax Burden in Nigeria

MutiChoice Nigeria and MultiChoice Africa are under severe paralysis right now: Nigeria’s tax agency, FIRS, has asked commercial banks to freeze and recover N1.8 trillion ($4.5 billion) from the accounts of these firms. According to the government, the companies have refused to open their books, servers, etc for independent audit, and the necessary high voltage searchlighting: “The companies would not promptly respond to correspondences, they lacked 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.”

Executive Chairman, FIRS, Mr Muhammad Nami, stated: “Information currently at the disposal of FIRS has revealed a tax liability for relevant years of assessment for ?1.8 trillion and $342.5 million.

FIRS is powered 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.

With these relevant sections, all bankers to MCA and MCN in Nigeria are 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. It is further requested that the FIRS be informed of any transactions before execution on the account, especially transfers of funds to any of their subsidiaries.

It is important that Nigeria puts a stop to all tax frauds that had been going on for too long and all companies must be held accountable and made to pay their fair share of relevant taxes including back duty taxes owed especially VAT.”

Nigeria’s main grudge is that despite the success of MultiChoice in the land, the nation is not seeing the impact on the tax collected: according to the government, MultiChoice is alleged to have paid zero VAT in Nigeria since inception. Is that really possible? Should that be the case, EFCC should open files for all auditors, tax officers and former FIRS etc who ratified the books of the companies. Bear with me, I am finding it hard to believe that one, but who knows – this is Nigeria.

Nollywood, you have a script here: how to make $billions and pay zero VAT in Nigeria. Sure, DStv and Gotv may not come along!

“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 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,” 

MutiChoice denies the accusation via a statement: “MultiChoice Nigeria 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.”

Yet, if this comes out in “affirmative”, using marine radio slang, MutiChoice will have limited choices in Nigeria.

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One thought on “The MultiChoice’s limited Choices on $4.5 Billion Tax Burden in Nigeria

  1. It’s just like seeing someone putting his hand in a basket full of oranges, and you aren’t quite sure how many he took, so you simply declare that you saw him taking ten oranges, with the hope that he will shout, ‘it’s not true, I only took two’, then you retort, Ok, return them. Mission accomplished!

    The FIRS has no clue on how much MultiChoice is owing it, so its best bet was to declare eye popping sum, hoping that MultiChoice would vehemently reject such, then it will ask it, Ok, let’s see your server? It’s a nice script.

    MultiChoice says it’s engaging, so both parties will be fine, after the media dance…

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