At last, MultiChoice loses to FIRS in $342m tax battle

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At last, Multichoice Africa Holdings B.V has lost in its long-drawn battle with the Federal Inland Revenue Service (FIRS) over its disputed $342m tax battle, as the Tax Appeal Tribunal, on Tuesday, struck out its appeal of purported tax liability by FIRS for want of diligent prosecution. The tribunal ordered it to pay up the $342m tax assessment handed over by the FIRS.

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Multichoice Africa Holdings is the parent company of Multichoice Nigeria and has engaged FIRS in fierce legal fireworks to challenge the assessment of the FIRS on its unpaid Value Added Tax (VAT) amounting to over $123.7 million.

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The tribunal while delivering its judgment on the appeal filed by the company upheld the preliminary objection of the FIRS against the appeal of Multichoice Africa Holdings B.V.

The Tribunal stated that the South African company did not comply with Order 3 Rule 6 of the Tax Appeal Tribunal (Procedure) Rules, 2021, which requires that an appellant is to deposit half of the assessed levy it is disputing before it can be heard on appeal.

In addition to depositing the sum, the appellant is required to file along with its appeal an affidavit verifying the payment which the company also failed to comply with.

According to the Tribunal, the sum is to be paid as a security for the hearing of any tax appeal. The rule states that “for an appeal against the tax authority, the aggrieved person will pay 50% of the disputed amount into designated account by the Tribunal before hearing as security for prosecuting the appeal”.

FIRS had served a notice of unpaid VAT on Multichoice Africa Holdings B.V. but the company disputed the assessment and filed an appeal at the tribunal.

It, however, failed to comply with provisions of tax laws by the refusal to make the required deposit as stipulated by the Tribunal Rules.

With the ruling, the FIRS is expected to enforce the payment of the principal sum of $123.7 million being unpaid VAT by Multichoice Africa Holdings B.V. as well as interest and penalty at $218 million, totalling over $342 million.

It will be recalled that the FIRS had served Multichoice Africa Holdings B.V. a notice of assessment of unpaid VAT on the 16th of June, 2021, and the company consequently appealed the assessment at the Tax Appeal Tribunal on the ground of being too excessive.

Multichoice Africa Holdings, the parent company of Multichoice Nigeria, though, providing services to its Nigerian arm was said not to have paid Value Added Tax since inception./GVE/SHARE THIS

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