In a significant development, MultiChoice Group (MCGJ.J), Africa’s largest pay TV conglomerate, has reached a settlement with Nigerian tax authorities regarding a tax dispute.
The resolution involves a total tax payment of approximately $37.3 million by MultiChoice’s subsidiary entities.
This announcement follows a series of actions taken by the Nigerian Federal Inland Revenue Service (FIRS) in 2022, including the freezing of MultiChoice Nigeria’s accounts. At that time, MultiChoice Group faced substantial tax claims, totaling 1.8 trillion naira ($1.27 billion) for its Nigerian operations, along with an additional $342 million for value-added taxes.
However, MultiChoice Group disclosed that the combined tax liability of 35.4 billion naira, owed by MultiChoice Nigeria and MultiChoice Africa Holdings, will be offset from security deposits and good faith payments previously made.
Earlier this year, in March 2022, MultiChoice Nigeria and the FIRS reached an out-of-court settlement regarding their tax disputes, amounting to a $4.4 billion tax settlement.
As part of the agreement, MultiChoice withdrew all pending lawsuits, and the FIRS agreed to conduct a forensic audit of MultiChoice’s accounts to determine its tax liability.
The tax dispute stemmed from actions initiated by the FIRS in April 2021 when Notices of Assessment and Demand Notices totaling N1.8 trillion were issued to MultiChoice. MultiChoice disputed these assessments, leading to legal proceedings at the Tax Appeal Tribunal and the Federal High Court.
In August, the TAT ordered MultiChoice to pay 50% of the N1.8 trillion determined as the outstanding tax amount.
The resolution of this tax dispute represents a significant milestone for MultiChoice Group and the FIRS, providing clarity and closure to a longstanding issue. It marks a step forward in ensuring compliance with tax regulations and fostering a conducive business environment in Nigeria.
