FIRS Freezes MultiChoice’s Accounts Over N1.8trn Tax Liabilities

The Federal Inland Revenue Service (FIRS) has frozen the accounts of MultiChoice Nigeria Limited and its parent company over the company’s inability to pay over N1.8trn in tax.

In a statement on Thursday by its Executive Chairman, Muhammad Nami, the FIRS said it also appointed Nigerian Deposit Money Banks as agents to recover the money.

Nami disclosed that the decision to appoint the banks as agents and to freeze the accounts was a result of the group’s under-remittance of taxes and continued refusal to grant FIRS access to its servers for audit.

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

Speaking further, Nami insisted that Nigeria must put a stop to all tax frauds that have been going on for too long.

The statement reads: “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.

“The level of non-compliance by Multi-Choice Africa (MCA), the parent Company of Multi-Choice 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 ate 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,” Mr. Nami said.

According to the FIRS boss, Nigeria contributes 34% of total revenue for the Multi-Choice group.

“The next to Nigeria from intelligence gathering is Kenya with 11%, and Zambia is in third place with 10%. The rest of Africa where they have a presence accounts for 45% of the group’s total revenue.

“Information currently at the disposal of FIRS has revealed a tax liability for relevant years of assessment for ₦1,822,923,909,313.94 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 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 Federal Inland Revenue Service be informed of any transactions before EXECUTION on the account, especially transfers of funds to any of their subsidiaries.”