Africa’s biggest cable TV company, MultiChoice Group, has announced that its Nigerian subsidiary has agreed to pay about $37.3m as part of a tax settlement arrangement with the Federal Inland Revenue Service.
MultiChoice is the owner of the satellite television, DSTV, a popular subscription-based platform in Nigeria.
A statement by the firm on Thursday read, “In terms of the agreement, MultiChoice Nigeria and MultiChoice Africa shall pay a total tax amount of N35.4bn ($37.3m), to be offset against the security deposits and good faith payments made to date.”
This follows the FIRS decision to freeze MultiChoice Nigeria’s accounts in 2022 after serving the group with a N1.8tn ($1.27bn) tax claim for its Nigeria operation and a $342m claim for value-added taxes.
In 2021, the tax agency appointed some commercial banks to recover N1.8tn following the group’scontinued refusal to grant FIRS access to their servers for audit.
The then FIRS Executive Chairman, Muhammad Nami, said, “The level of non-compliance by MultiChoice Africa, the parent Company of MultiChoice Nigeria is very alarming. The parent company, which provides services to MCN, has never paid Value Added Tax since its inception.”
The tax agency also complained that the group 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.”
MultiChoice later went to court to challenge the penalty imposed by the tax authority for skipping taxes and denying auditors access to its servers
In March 2022, MultiChoice and FIRS reached a resolution for their tax disputes. As a result, MultiChoice withdrew all ongoing lawsuits, and FIRS conducted a forensic audit to determine the accurate tax liability.
The statement then read in part, “By the broad terms of the agreement, MultiChoice shall withdraw all pending lawsuits towards an amicable resolution of the dispute.
“Also, as part of the agreement, the FIRS commenced a forensic systems audit of MultiChoice accounts on Tuesday, 8 March 2022 to determine the tax liability of the Company.”
Approximately 34 percent of the MultiChoice group’s total revenue comes from Nigeria, followed by Kenya at 11 percent, and Zambia in third place with around 10 percent.
The remaining African countries where the group operates contribute about 45 percent to the total revenue, according to the group’s report.