Following the purported directive by the Nigerian Tax Appeal Tribunal (TAT), directing Multichoice Nigeria to pay $2.2 billion which is 50 percent of a disputed 1.8 trillion naira ($4.38 billion) tax bill relating to previous years, the company has released a statement countering the order.
The company stated that the order issued by TAT does not compel MultiChoice Nigeria to make payment of the stated amount, being half of the disputed tax assessment which is under appeal.
Multichoice Nigeria’s statement reads: “The direction issued by the TAT in accordance with paragraph 15(7) of the Fifth Schedule to the FIRS Establishment Act requires MultiChoice Nigeria to deposit with FIRS an amount equal to the tax paid by MultiChoice Nigeria in the preceding year of assessment OR one half of the disputed tax assessment under appeal, whichever is the lesser amount plus 10%.
The lesser amount is the tax paid by MultiChoice Nigeria in the previous assessed year which is substantially less than the disputed assessment.
“MultiChoice Nigeria is a law-abiding corporate citizen and continues to engage constructively with FIRS in an attempt to resolve this matter.”
Multichoice Nigeria which is a division of a South African group, provides DSTV, a cable TV product that is popular in Nigeria.
The Federal inland Revenue Service earlier stated that the deposit of 50 percent of the sum was a condition that had to be fulfilled by Multichoice Nigeria Ltd before the tribunal could hear a full appeal on the matter.
The statement came after the FIRS said in July it had instructed banks to freeze the accounts of Multichoice because the company had refused to grant access for the tax auditors to its servers.
FIRS Chairman Muhammad Nami said at the time that banks would have to recover the 1.8 trillion naira which the tax service said it was owed.
He said the tax tribunal adjourned the case until September 23, subject to the company complying with its order.
Multichoice is the latest South African group with a significant presence in Nigeria to face a multi-billion-dollar tax demand from the West African country.