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FIRS moves to recover N1.8tr tax from MultiChoice

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FIRS moves to recover N1.8trn tax from Multichoice

 

The Federal Inland Revenue Service (FIRS) has moved to recover the sum of N1.8 trillion from Africa’s biggest pay television group, MultiChoice, operators of DSTV.

To this end, FIRS has appointed some commercial banks in Nigeria to recover the humongous sum from Messrs MultiChoice Nigeria Limited and MultiChoice Africa.

A statement signed by the Executive Chairman of the FIRS, Muhammad Nami, confirmed the appointment and outlined the reasons for the decision as the group’s continued refusal to grant FIRS access to its servers for audit, the companies’ persistent breach of agreements and undertakings with the Service, under-remittance of taxes, among other things.

The statement issued Thursday by the Service’s Director of Communications and Liaison, Abdullahi Ahmad, is titled, ‘Federal Inland Revenue Service (FIRS) Appoints Commercial Banks to Freeze and Recover N1.8 trillion from the Accounts of Messrs Multi-Choice Nigeria Limited (MCN) and Multichoice Africa (MCA)’.

It read in part, “The FIRS has appointed some commercial banks as agents to recover the sum of N1.8 trillion from accounts of Messrs MultiChoice Nigeria Limited (MCN) And MultiChoice Africa (MCA). This was contained in a statement signed by the Executive Chairman, Muhammad Nami.

“The statement confirmed that 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.

“It was discovered that the companies persistently breached all agreements and undertakings with the Service, they would not promptly respond to correspondences, they lack data integrity and are not transparent as they continually deny FIRS access to their records.

“Particularly, MCN has avoided giving the FIRS accurate information on the number of its subscribers and income.

“The companies are involved in the under-remittance of taxes which necessitated a critical review of the tax-compliance level of the company.

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“According to the statement the group’s performance does not reflect in its tax obligations and compliance level in Nigeria.

“The level of non-compliance by Multi-Choice Africa (MCA), the parent Company of Multi-Choice Nigeria (MCN) is very alarming. The parent company, which provides services to MCN has never paid Value Added Tax (VAT) since its inception.”

The statement noted that based on the information currently at the disposal of the FIRS, the MultiChoice group and Messrs MultiChoice Nigeria Limited have a tax liability for relevant years of ₦1,822,923,909,313.94 and $342,531,206.

It added that, “Under FIRS powers in Section 49 of the Companies Income Tax Act Cap C21 LFN 2004 as amended, Section 41 of the Value Added Tax Act Cap V1 LFN 2004 as amended and Section 31 of the FIRS (Establishment) Act No. 13 of 2007, all bankers to MCA & MCN in Nigeria were therefore appointed as Collecting Agents for the full recovery of the aforesaid tax debt.”

Therefore, all the affected banks were required to sweep balances in each of the above-mentioned entities’ accounts and pay the same in full or part settlement of the companies’ respective tax debts until full recovery.

The FIRS further directed the banks to carry out the sweep balances before the execution of any transaction involving the companies or any of their subsidiaries, adding that the Service should be informed of any transactions before execution on the account, especially transfers of funds to any of their subsidiaries.

While expressing the Service’s displeasure at tax evasions committed by foreign-based companies operating within the country, Nami emphasized the need to put a stop to all tax frauds in the country.

He added that all companies must be held accountable and made to pay their fair share of relevant taxes including back duty taxes owed, especially VAT for which they are ordinarily agents of collection.

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