MultiChoice Group (MCGJ.J), Africa’s largest pay TV conglomerate, disclosed on Thursday that its subsidiary entities in Nigeria had settled a tax dispute with Nigerian tax authorities, thereby agreeing to pay about $37.3 million to the Federal Inland Revenue Service (FIRS).
In 2022, the Federal Inland Revenue Service (FIRS) froze MultiChoice Nigeria’s accounts due to its failure to file tax returns as required by the fiscal law.
In addition, the federal tax revenue agency issued MultiChoice Group a tax claim of N1.8 trillion (about $1.27 billion) for its operations in Nigeria, along with a separate claim of $342 million for value-added tax (VAT).
However, the group claimed that its combined tax liability to the Nigerian government totalled N35.4 billion, owed by MultiChoice Nigeria and MultiChoice Africa Holdings, and the tax would be deducted from the security deposits and good faith payments made thus far.
In March 2022, the FIRS and MultiChoice Nigeria agreed for an out-of-court settlement of the pending tax disputes over a $4.4 billion tax settlement.
Following the mutual deal, MultiChoice withdrew its pending lawsuits filed in 2021 challenging the tax liability while the FIRS agreed to conduct a forensic audit of MultiChoice’s accounts to determine the company’s tax liability.
However, both parties agreed to an amicably resolve the pending tax dispute matter.
Specifically, the joint statement by the parties then read inter alia: “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”, it added.
