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Multichoice/DSTV Ordered To Pay FG $2.2bn Over Unremitted 900bn VAT Paid By Subscribers

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The Tax Appeal Tribunal (TAT) has ordered Multichoice Nigeria Limited to pay 50 per cent of N1.8 trillion or N900 billion which the Federal Inland Revenue Service (FIRS) determined through a forensic audit of the parent company of DSTV and GOTV.

Naija News reports that the sum constitutes what the tax agency calculated as due in taxation to the Federal Government of Nigeria from Multichoice after an investigation over several months to determine the extent to which Multichoice has been evading taxes in Nigeria.

The tribunal sitting in Lagos also ordered the South African firm to pay an additional N90 billion or 10 per cent of the N900 billion to the FIRS, approximating to $2.2bn, precedent to hearing of its appeal against the Demand Note of N1, 822, 923,909,313.94 served on it by the tax agency as the assessed amount owed over the years that it has failed to pay tax.

The five-member tribunal led by its Chairman, Prof. A.B. Ahmed, issued the order following an application to it by the Counsel to FIRS in line with paragraph 15(7) of the Fifth Schedule of the FIRS Act 2007.

During the session of the court on Tuesday, the FIRS Counsel had relied on Order XI of the TAT Procedure Rules 2010 which enables a party to make an application at any stage of the proceedings. He drew the attention of the Tribunal to the rule and urged it to compel Multichoice to abide by the rule.

Paragraph 15(7) of the Fifth Schedule to the Federal Inland Revenue Service (Establishment) Act 2007 (FIRS Act) requires persons or companies like Multichoice Nigeria Ltd that is seeking to contest a tax assessment to pay all or a stipulated percentage of the tax assessed before they can be allowed to argue their appeal contesting the assessment at TAT.

FIRS had in July, following the refusal of Multichoice Nigeria Ltd to accede to the request in the demand note, ordered bankers to Multichoice Nigeria Limited to freeze a total of N1.8 trillion from the firm’s account.

Multichoice Nigeria Limited, in contesting the freezing order, filed the matter at the TAT with Appeal No: TAT/LZ/CIT/062/2021 19/08/2021 following its dispute over FIRS’ issuance of Notices of Assessment and Demand Note in the sum of N1, 822, 923,909,313.94 on 7 April 2021.

At the hearing of the Multichoice Nigeria Limited v. Federal Inland Revenue Service, the appellant amended its Notice of Appeal and thereafter sought through its counsel, Bidemi Olumide of AO2 Law Firm for an adjournment of the proceedings to enable it to respond to the FIRS’ formal application for Accelerated hearing of the Appeal and prayer before the tribunal directing Multichoice to produce the integrated Annual report and Management Account Statements of Multichoice Group Ltd for Tax Years 2012 to 2020., among other prayers.

In its response, Counsel to the FIRS asked the Tax Appeal Tribunal to issue an order requiring that Multichoice makes the statutory deposit of 50 per cent of the disputed sum.

After hearing arguments from both parties, the tribunal upheld the FIRS submission and directed Multichoice Nigeria Limited to deposit with the FIRS an amount equals 50 per cent of the Assessment under the Appeal plus a sum equal to 10 per cent of the said deposit as a condition precedent for further Hearing of the Appeal.

The Tax Appeal Tribunal thereafter adjourned the Appeal to 23 September 2021 for the report of compliance with its Order and continuation of the hearing, subject to compliance with the Tribunal’s order.

Source: Naija News