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Wednesday, August 25, 2021

FIRS vs Multichoice tax scramble: Tribunal orders Multichoice to deposit N900bn with FIRS before hearing appeal

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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