Nigeria’s Tax Appeal Tribunal (TAT) has ruled in favor of MultiChoice Nigeria Limited in its ongoing legal battle against the Federal Inland Revenue Service (FIRS).
Earlier, MultiChoice had filed an appeal over a perceived wrongful assessment spanning 10 years, which resulted in a huge tax levied by FIRS.
In August, TAT ordered MultiChoice to pay N904 billion ($2.2 billion) to FIRS as a precondition for hearing the case. MultiChoice needed to pay a statutory deposit of 50 percent of the alleged tax liability before the court continued with the hearing.
However, yesterday, Oct. 20, MultiChoice met the requisite conditions to prosecute an appeal against the N1.8 trillion ($4.3 billion) levied against the company by the tax master, according to TAT.
The administrative court said it was satisfied that MultiChoice had complied with the directive by depositing the N8 billion ($2.12 billion), as instructed by the FIRS Act.*
The tribunal dismissed FIRS’s argument that the security deposit that MultiChoice was required to make should cover 10 consecutive financial years and not just that of 2019.
MultiChoice Africa is a digital media entertainment firm and a subsidiary of South Africa’s MultiChoice Group, which provides digital satellite TV and other streaming entertainment services.
John Ugbe heads the company’s Nigeria operations as its CEO.
The company operates DStv, a major service in Sub-Saharan Africa, and GOtv, a minor service operating in more than nine countries in the region, and Showmax.
*TAT rules require any taxpayer who disputes a tax assessment to make a statutory deposit as required under the FIRS (Establishment) Act 2007, as a condition to be met before it hears their appeal. Paragraph 15(7)(c) of the fifth schedule of the FIRS Act 2007 requires an appellant to pay 50 percent of the tax paid the previous year plus a 10-percent mark-up as security before prosecuting an appeal.