MultiChoice Rejects Tax Tribunal’s Ruling On $342m Payment

MultiChoice Africa Holdings (MAH), the parent company of MultiChoice Nigeria, has rejected Tuesday’s ruling of the Tax Appeal Tribunal (TAT), which dismissed its appeal against the $342million Value Added Tax (VAT) bill slapped on it by the Federal Inland Revenue Service (FIRS).

The company, which made its position known in a statement yesterday, also stated it will appeal the ruling at the Federal High Court, adding that the TAT ruling was based on technicality rather than the merits of the case.

“MAH respectfully disagrees with the ruling, which was based on a technicality rather than the merits of the case. Therefore, we will be lodging an appeal at the Federal High Court against the ruling.

“This tax appeal is a separate and distinct matter from the appeal launched by MultiChoice Nigeria (MCN), in which the TAT found in MCN’s favour last week, allowing it to proceed with that appeal,” the company stated.

The multinational pay-TV provider had lost the legal battle over a disputed $342million tax bill on Tuesday.

MultiChoice had opposed claims by then FIRS, notably over its tax indebtedness to the Federal Government. However, its appeal was struck out for lack of diligent prosecution.

Delivering judgment on the appeal filed by MultiChoice, the tribunal upheld the preliminary objection of the FIRS against the appeal of Multichoice Africa Holdings B.V. Further, the TAT ruled that the firm did not comply with existing tax laws; specifically, Order 3 Rule 6 of the Tax Appeal Tribunal (Procedure) Rules, 2021; which stipulates 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 expected to file along with its appeal an affidavit verifying the payment. The Tribunal had stated that MultiChoice equally failed to comply with this procedure. Equally important, the tribunal held that the sum is to be paid as a security for the hearing of any tax appeal.

It cited the rule which states: “For an appeal against the tax authority, the aggrieved person will pay 50 per cent of the disputed amount into designated account by the Tribunal before hearing as security for prosecuting the appeal.”

Earlier on June 16, 2021, the FIRS had served a notice of unpaid VAT on Multichoice Africa Holdings B.V. The FIRS claimed that the company had not remitted VAT since inception, a claim it had disputed. Consequently, the company had challenged the assessment and filed an appeal at the tribunal. But in filing the appeal, MultiChoice failed to comply with provisions of tax laws by failing to make the required deposit as stipulated by the Tribunal Rules.

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.

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