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Multichoice deposits 8bn in FIRS account over tax evasion dispute

MultiChoice Nigeria Limited said Thursday that it has paid N8 billion in two tranches to the Federal Inland Revenue Service (FIRS) account as required by the law guiding disputes over tax evasion.

MultiChoice, the parent company of popular subscription-based platforms in Nigeria- DSTV and Gotv, made this known at the resumption of the tribunal hearing over a tax evasion dispute with the FIRS.

The FIRS claims that MultiChoice owes back taxes worth N1.8 trillion, a claim the company disputes.

The company is however required by Paragraph 15(7)(c) of the fifth schedule of the FIRS Act, 2007, to pay 50 percent of the tax paid the previous year plus 10 percent mark-up as security before prosecuting an appeal.

At the last hearing, the Tax Appeal Tribunal had upheld the FIRS submission and directed MultiChoice to deposit with the FIRS an amount equals 50 percent of the assessment under the appeal plus a sum equal to 10 percent of the said deposit as a condition for further hearing of the appeal.

The directive had generated confusion among stakeholders as FIRS had asked the company to pay 50 percent of the disputed sum (N900 billion) under assessment.

Multichoice insists the amount is “arbitrary.”

“No science to it and respondent (FIRS) contrived the numbers,” MultiChoice said of the N1.8 trillion tax claim.

Read Also: Multichoice denies receiving notice from FIRS amid ₦1.8trn tax fraud allegation

“The reality of the appellant’s (MultiChoice) business is far from what the respondent fixes in its office,” the company told the tribunal at the resumed hearing.

“In respect of this dispute, N8 billion has been paid in the case pursuant to paragraph 15(7) of the FIRS Act. And N2bn in respect of VAT in another matter here before your honour,” Multichoice said.

“We provided two options for the tribunal to work with. Either for 2010 as a preceding year for 2011 or 2019 because we want it to expedite actions. The N1.8trn burden is resting on our finances and our auditors will look at our books if we did not get it out quickly,” the company added.

The FIRS however urged the administrative court to discontinue the hearing of the appeal and enter judgment against MultiChoice if the company fails to fully comply with the directive of 50 percent of the N1.8 trillion tax assessment for the years under review.

“We make this submission on the basis that the appellant while they have filed certain affidavit in which they purport to verify that they have complied with the tribunal… those documents are self-contradictory, lacked value. The duty is for the appellant to prove they have complied with the tribunal order,” FIRS said.

“Our prayer is made on the basis of the provision of paragraph 15 sub 7 of the 5th schedule of FIRS Establishment Act.

“We urged the tribunal to refer to paragraph 3 of the appellant’s owned amendment notice of appeal, particularly paragraph 3. 4, dated and filed July 27, 2021.

“If this tribunal would look at the language of paragraphs 3 and 4 of appellant notice of appeal and provision of FIRS Act, it will see the accounting years which is the subject of assessment from 2011 to 2020.

“A preceding year of each of this assessment will require this tribunal to expect the appellant to deposit the charge for each year preceding their accounting year.

“What they have done is to selectively pick and choose the preceding year to reckon with.

“They chose 2010 and made a deposit.

“And they turned back to chose 2019 as another preceding year of N5.3bn.”

The FIRS urged the tribunal to ask MultiChoice to make payment for all preceding years under appeal.

“Our submission is that there are 10 consecutive years, and 2010 or 2019 cant be proceeding years to 2011,” the tax authority said.

MultiChoice FIRS Tax

“The preceding years under appeal begin from 2010 and ends in 2019. They picked and chose 2010 and 2019 and forget 2011,12,13,14,15,16,17, and 2018. And that is why they have two affidavits of compliance.

“Our submission is that the assessment under appeal ought and should be confirmed by this tribunal.

“We urge you the Chairman, and other members to please direct that this appeal is foreclosed on the basis of non-compliance in view of the absence of clear evidence on the order of August 2021.”

AB Ahmad, the tribunal chairman, noted the arguments of both parties and adjourned to October 20, 2021, for the ruling, asking all parties to submit necessary notices before the date.

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