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JUST IN: MultiChoice Dealt A Major Blow, Loses Tax Appeal, Ordered To Pay N194bn To Nigerian Govternment

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The legal tussle by South African Company, Multichoice Africa Holdings B.V with Nigeria’s tax authorities over the disputed $342 million (about N194 billion) tax has been struck out.

The company has now been ordered to pay the sum of $342m to the Federal Inland Revenue Services (FIRS).

The ruling was handed down on Tuesday, October 26, by the Tax Appeal Tribunal.

The Tribunal struck out MultiChoice appeal for lack of diligent prosecution, and ordered It to pay up the tax assessment handed over to It by the FIRS.

Multichoice Africa Holdings is the parent company of Multichoice Nigeria and has engaged FIRS in court to challenge the assessment of the FIRS on it of unpaid Value Added Tax (VAT) amounting to over $123.7 million.

It will be recalled that on June 16, 2021, the FIRS had served Multichoice Africa Holdings B.V. a notice of assessment of unpaid VAT.

The company had consequently appealed the assessment at the Tax Appeal Tribunal on the ground of being too excessive.

However, the Tribunal while delivering its judgment on the appeal filed by the company upheld the preliminary objection of the FIRS against the appeal of Multichoice and stated that the South African company did not comply with Order 3 Rule 6 of the Tax Appeal Tribunal rules, 2021, which requires that an appellant is to deposit half of the assessed amount it is disputing before it can be heard on appeal.

In addition to depositing the sum, the appellant is required to file along with its appeal an affidavit verifying the payment which the company also failed to comply with.

According to Tribune Online, the sum is to be paid as a security for the hearing of any tax appeal.

The rule states that “for an appeal against the tax authority, the aggrieved person will pay 50 percent of the disputed amount into designated account by the Tribunal before hearing as security for prosecuting the appeal.”

Multichoice Africa Holdings through providing services to its Nigerian arm was said not to have paid Value Added Tax since inception.

The company are operators of DSTV, GOTV, and ShowMax, and is Africa’s biggest pay-TV provider.

With the ruling, the FIRS is expected to enforce the payment of the principal sum of $123.7 million, being unpaid VAT by Multichoice Africa Holdings B.V; as well as interest and penalty at $218 million, amounting to over $342 million.

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