MultiChoice resolves tax dispute with Nigeria, agrees to $37M settlement
By Joseph Ekeng
MultiChoice, the broadcasting giant, has reached a landmark settlement with Nigeria’s Federal Inland Revenue Services (FIRS), agreeing to pay ₦35 billion ($37 million) to settle a prolonged three-year tax dispute. This resolution comes after a tumultuous legal battle that saw the freezing of MultiChoice’s bank accounts following accusations of a staggering ₦1.8 trillion ($4.4 billion) tax fraud in June 2021.
“In terms of the agreement, [MultiChoice Nigeria] and [MultiChoice Africa] shall pay a total tax amount of ₦35.4bn (US$37.3m), to be offset against the security deposits and good faith payments made to date,” MultiChoice stated in a shareholder announcement.
The company has already disbursed a total of $56 million in efforts to settle the contentious claim.
Despite the significant payments, MultiChoice has maintained its innocence throughout the ordeal, consistently asserting that it had not engaged in any wrongdoing. In a bold move in August 2021, the broadcasting giant lodged an appeal challenging the mammoth ₦1.8 trillion tax assessment with the Tax Appeal Tribunal. The tribunal later ruled for MultiChoice to pay half of the disputed amount, prompting the company to make a $19 million deposit as part of the ongoing legal process.
The turning point came In March 2022 when MultiChoice and FIRS opted for a conciliatory approach to resolve their protracted tax disputes. Subsequently, MultiChoice withdrew all existing lawsuits, paving the way for FIRS to conduct a comprehensive forensic audit aimed at determining the accurate extent of the broadcasting behemoth’s tax obligations.
This resolution marks a significant milestone in MultiChoice’s operations within Nigeria, providing clarity and closure to a contentious chapter fraught with legal wrangling and financial uncertainties. With the tax matter now settled, MultiChoice can redirect its focus towards delivering top-tier entertainment services to its vast subscriber base across the African continent.