South African Firm, Multichoice Loses Appeal, Ordered To Pay N194Billion Tax To Nigeria
The long-running legal battle between Multichoice Africa Holdings B.V. and the Nigerian government’s Federal Inland Revenue Services (FIRS) over the disputed $342 million (about N194 billion) tax has been settled.
According to the Daily Post, the Tax Appeal Tribunal dismissed the company’s appeal for lack of diligence and ordered it to pay the $342 million tax assessment handed over to them by the FIRS.
Multichoice Africa Holdings, the parent company of Multichoice Nigeria, has taken on the FIRS in a judicial battle to overturn the FIRS’ assessment of over $123.7 million in unpaid Value Added Tax (VAT).
While delivering its judgment on the company’s appeal, the tribunal upheld the FIRS’ preliminary objection to Multichoice Africa Holdings B.V.’s appeal.
The Tribunal upheld the South African company’s failure to comply with Order 3 Rule 6 of the Tax Appeal Tribunal (Procedure) Rules, 2021, which requires an appellant to deposit half of the assessed sum in dispute before being heard on appeal.
In addition to depositing the funds, the appellant is required to provide an affidavit certifying the payment with its appeal, which the corporation has also failed to do.
The sum is to be paid as a security for the hearing of any tax appeal, according to the Tribunal. “For an appeal against the tax authorities, the aggrieved individual will deposit 50% of the disputed sum into a designated account by the Tribunal before hearing as security for prosecuting the appeal,” according to the rule.
Multichoice Africa Holdings B.V. was served with a notice of unpaid VAT by the FIRS, but the company vehemently challenged the assessment and filed an appeal with the tribunal.
It, on the other hand, violated tax regulations by refusing to make the requisite deposit as prescribed by the Tribunal Rules.
The FIRS is likely to enforce the payment of $123.7 million in unpaid VAT by Multichoice Africa Holdings B.V., as well as $218 million in interest and penalties, for a total of over $342 million.
On June 16, 2021, the FIRS issued a notice of assessment of overdue VAT to Multichoice Africa Holdings B.V.
As a result, the corporation filed an appeal with the Tax Appeal Tribunal, claiming that the assessment was excessive.
Multichoice Africa Holdings, the parent company of Multichoice Nigeria, is believed to have avoided paying VAT from its establishment, despite delivering services to its Nigerian arm.
