MultiChoice, Africa’s pay TV company, has reached a settlement with Nigerian tax authorities, putting an end to a three-year-long tax dispute.
The settlement involves MultiChoice Nigeria and MultiChoice Africa Holdings agreeing to pay a total tax amount of approximately $37.3 million.
The resolution comes after Nigeria’s Federal Inland Revenue Service (FIRS) froze MultiChoice Nigeria’s accounts in 2022 and issued a sturdy tax claim totaling ₦1.8 trillion ($4.4 billion) for its Nigerian operations, along with a separate $342 million claim for value-added taxes.
In a statement released by MultiChoice Group, it was disclosed that the total tax amount of N35.4 billion to be paid by MultiChoice Nigeria and MultiChoice Africa Holdings will be offset against the security deposits and good faith payments made to date.
The settlement marks the conclusion of a protracted legal conflict that began in June 2021 when FIRS accused the Group of a ₦1.8 trillion tax fraud, prompting the freezing of the company’s bank accounts. Despite MultiChoice’s insistence on its innocence, FIRS pressed forward with the allegations.
Throughout the dispute, the Group maintained its stance, even filing an appeal in August 2021 to contest the tax bill with the Tax Appeal Tribunal. Following negotiations, the tribunal ruled for the TV company to pay half the amount, resulting in a $19 million deposit by the broadcasting giant.
By March 2022, both MultiChoice and FIRS opted for an amicable resolution, withdrawing all existing lawsuits. As part of the settlement terms, FIRS conducted a forensic audit to accurately determine MultiChoice’s tax liability, ultimately leading to the agreed-upon settlement of $37 million.
Despite the financial settlement, the TV company reiterated its position of having committed no wrongdoing throughout the ordeal. The resolution of the tax dispute will allow the company to refocus its efforts on its core operations and further expansion initiatives in Africa’s media sector.