MultiChoice Group, Africa’s largest cable TV company, has made an announcement regarding its Nigerian subsidiary’s agreement to settle tax disputes with the Federal Inland Revenue Service (FIRS) by paying approximately $37.3 million.
The company, which owns the popular satellite television platform DSTV, disclosed in a statement on Thursday that MultiChoice Nigeria and MultiChoice Africa would collectively pay a total tax amount of N35.4 billion ($37.3 million).
This payment will be offset against the security deposits and good faith payments made by the company to date.
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The resolution follows the FIRS decision to freeze the company Nigeria’s accounts in 2022 after serving the group with a tax claim of N1.8 trillion ($1.27 billion) for its Nigeria operations and an additional $342 million claim for value-added taxes.
In response to the FIRS’s actions, the company went to court to challenge the penalties imposed for tax evasion and for denying auditors access to its servers.
In March 2022, both parties reached an agreement to resolve their tax disputes. As part of the agreement, MultiChoice withdrew all ongoing lawsuits, and the FIRS initiated a forensic audit to determine the accurate tax liability.
The statement further explained, “By the broad terms of the agreement, MultiChoice shall withdraw all pending lawsuits towards an amicable resolution of the dispute. Also, as part of the agreement, the FIRS commenced a forensic systems audit of MultiChoice accounts on Tuesday, 8 March 2022, to determine the tax liability of the Company.”
Approximately 34 percent of the MultiChoice group’s total revenue is derived from Nigeria, followed by Kenya at 11 percent and Zambia at 10 percent. The remaining African countries where the group operates contribute about 45 percent to the total revenue, according to the company’s report.