MultiChoice Nigeria has been in the news in recent times, not for the reason any business management will want as they are currently embattled in a heated back and forth with Nigeria’s Tax Umpire; the Federal Inland Revenue Service, FIRS over alleged tax outstandings and tax irregularities by the South African firm.

Following the FIRS’ announcement a few days ago, MultiChoice is currently alleged of a whopping ₦1.8 trillion tax fraud on the Nigerian Tax Administration. On the break of this news, several conspiracy theories have found their way into the public domain with some making it an attack on South Africa as a country while some applauded the Muhammad Nami led-FIRS for bringing to focus; tax fraud.

What you should know

  • FIRS alleged that MultiChoice’s subscribers base is about 20 million and by law should pay tax based on that. Taxmobile.online gathered that this represents the main cause of the argument. MultiChoice on the other hand has it that the entire subscribers base of the company in Africa is not even close to that.
  • MultiChoice further points that the FIRS has failed to understand how the market works, explaining that a lot of subscribers do not re-subscribe every month as presumed by FIRS.
  • The embattled South African firm reiterates that the tax remittance is straightforward as VAT of MultiChoice’s subscribers are paid automatically to the agency when customers renew their subscriptions.
  • FIRS has also directed MultiChoice to instruct outlets that are franchised private firms across the nation to allow the FIRS to assess their books. MultiChoice has replied that it can only advise but not instruct a private firm to open its books for the agency to confirm whether it is paying taxes or not.
  • MultiChoice Group has frowned at FIRS’ demand to pay tax in Nigeria after its subsidiary already pays tax to the agency. The group calls it multiple and illegal taxations.
Data integrity issues, prompt response to correspondences, shrouding records in secrecy, violation of operational agreements, suspicion of tax frauds, refusal to grant FIRS accurate numbers of subscribers are some of the irregularities MultiChoice is currently accused of.

Experts View

Some experts share that, FIRS’s move is geared toward gaining the attention of MultiChoice as they continue in the quest to generating more tax revenue for the government. Experts who share in this opinion have it that the end game of FIRS is to get a seat with MultiChoice to iron out tax debt which is not as high as the alleged ₦1.8trillion.

Check out the statement of Timothy Bamidele, a Chartered Accountant and a tax consultant.

No doubt, the company must be owing some tax but not up to ₦1.8 trillion. All the agency expects is for the firm to say ‘No’, we are not owing that much and disclose their actual tax debt.

At that point, both parties will meet and agree on the value of the debt. The company must certainly pay something, for a start since the issues have reached this stage.

Also, if MultiChoice Group makes money from some of its services in Nigeria then it has to pay tax to the Nigerian government. But if it is otherwise, as the source claimed, the company is not obliged to pay tax, only the subsidiary should pay taxes,”

On the other hand, some experts believe that the regulatory onslaught on MultiChoice is solely inspired by the FIRS’ quest for more revenue and nothing substantial. Find below random statements from these experts as culled from Nairametrics.

“It is quite sad because everything looks like the FIRS has not done any work but just did a simple straight-line calculation of what it thinks should be the revenue of MultiChoice and released the figure to the public. I think the FIRS has resumed its regulatory onslaught and it looks like it just wants to make a splash. There is a way you expect a serious regulator to do things because it is not going to get ₦1.8 trillion from MultiChoice. Things like this damage the confidence of foreign investors.

Feyi Fawehinmi, Advisory Board Member, BudgIT.

 “So, when I saw the MultiChoice story I was not surprised. It does not look like the regulator was serious because it based its conclusion on intelligence that cannot be proven. Let’s not forget that the said amount is supposed to be 32% of what the company generated a profit. If that is true, that means MultiChoice is easily one of the biggest companies we have in Nigeria, and I don’t think that is so. This makes a mockery of the nation and makes us feel like a joke because nobody will take us seriously.

Wale Akinrinboye, investment analyst.

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