A tax appeal tribunal (TAT)
sitting in Lagos has ordered Multichoice Nigeria Limited to deposit 50 percent
of the disputed N1.8 trillion tax with the Federal Inland Revenue Service
(FIRS).
Abdullahi Ismaila Ahmad, FIRS
spokesperson, made this known in a statement on Wednesday.
Multichoice is the owner of the
satellite televisions, DStv and Gotv – popular subscription-based platforms in
Nigeria
In July, the FIRS had appointed
some commercial banks as agents to recover N1.8 trillion from accounts of MultiChoice
Nigeria Limited (MCN) And MultiChoice Africa (MCA).
Muhammad Nami, FIRS chairman, had
said the decision to appoint the banks as agents and to freeze the accounts was
as a result of the group’s continued refusal to grant FIRS access to its
servers for audit.
Nami had noted that FIRS
discovered that the companies persistently breached all agreements and
undertakings with the service.
The FIRS said it determined
through a forensic audit that Multichoice Nigeria Limited had failed to pay to
the government of Nigeria taxes worth N1.8 trillion.
In its reaction, Multichoice had
assured that it would work with FIRS to prove its tax compliance.
At resumed hearing on Tuesday,
the five-member TAT led by A.B. Ahmed, its chairman, issued the order following
an application brought to the tribunal by the counsel to FIRS.
“The Counsel made the application
under Order XI of the TAT Procedure Rules 2010 which requires Multichoice, or
any other taxpayer who disputes their tax assessments, to make the statutory
deposit required under Paragraph 15(7) of the Fifth Schedule to the Federal
Inland Revenue Service (Establishment) Act 2007 (FIRS Act) as a condition that
must be fulfilled before the prosecution of the appeal brought before TAT,” the
statement reads.
“In certain defined circumstances
to which the Multichoice appeal fits, Paragraph 15(7) of the Fifth Schedule to
the Federal Inland Revenue Service (Establishment) Act 2007 (FIRS Act) requires
persons or companies seeking to contest a tax assessment to pay all or a
stipulated percentage of the tax assessed before they can be allowed to argue
their appeal contesting the assessment at TAT.”
The FIRS said Multichoice filed a
suit at the Lagos TAT following its dispute over the agency’s issuance of
notices of assessment and demand note in the sum of N1, 822, 923,909,313.94k on
April 7, 2021.
“At Tuesday’s hearing of the
matter in Appeal No: TAT/LZ/CIT/062/2021 19/08/2021 (Multichoice Nigeria
Limited v. Federal Inland Revenue Service), Multichoice Nigeria Limited amended
its Notice of Appeal and thereafter sought through its counsel, Bidemi Olumide
of AO2 Law Firm for an adjournment of the proceedings to enable it to respond
to the FIRS’ formal application for Accelerated hearing of the Appeal and
prayer before the TAT directing
Multichoice to produce before the Tribunal the integrated Annual report
and Management Account Statements of
Multichoice Group Ltd for Tax Years 2012
to 2020., among other prayers,” the statement further reads.
“In response, however, the FIRS
Counsel asked TAT to issue an order requiring that Multichoice makes the
statutory deposit of 50% of the disputed sum.”
After hearing arguments from both
sides, TAT upheld the FIRS submission and directed Multichoice Nigeria Limited
to deposit with the FIRS an amount equals 50 percent of the assessment under
the appeal plus a sum equal to 10% of the said deposit as a condition precedent
for further hearing of the appeal.
Thereafter, TAT adjourned the
appeal to 23 September 2021 for report
of compliance with its Order and continuation of the hearing, subject to
compliance with the Tribunal’s order.
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