Following a statement issued by the Federal Inland Revenue Services (FIRS) that The Tax Appeal Tribunal (TAT) in Lagos ordered Multichoice to pay 50% of disputable tax debt before appeal would be heard, MultiChoice, owners of cable television services, DStv and GOtv, explained in a statement on Wednesday, that the directive issued by TAT, in accordance with paragraph 15(7) of the Fifth Schedule to the Federal Inland Revenue Service (FIRS) Establishment Act, requires it (MultiChoice Nigeria) to deposit with FIRS an amount equal to the tax paid by MultiChoice Nigeria in the preceding year of assessment or one half of the disputed tax assessment under appeal, whichever is the lesser amount plus 10 per cent.
Multichoice, a South African firm operating in Nigeria and the FIRS have been locking horns at the tax tribunal over the sum of N1.8 trillion, the revenue generating agency claimed being amount Multichoice was owing.
The statement reads: “MultiChoice Nigeria has noted today’s media statement on the Tax Appeal Tribunal appeal hearing held on August 24, 2021.
“The directive issued by the TAT does not compel MultiChoice Nigeria to make payment of 50 per cent of N1.8 trillion, being half of the disputed tax assessment, which is under appeal.
“The directive issued by the TAT in accordance with paragraph 15(7) of the Fifth Schedule to the FIRS Establishment Act requires MultiChoice Nigeria to deposit with FIRS an amount equal to the tax paid by MultiChoice Nigeria in the preceding year of assessment or one half of the disputed tax assessment under appeal, whichever is the lesser amount plus 10 per cent. The lesser amount is the tax paid by MultiChoice Nigeria in the previous assessed year, which is substantially less than the disputed assessment.
“MultiChoice Nigeria is a law-abiding corporate citizen and continues to engage constructively with FIRS in an attempt to resolve this matter.”
FIRS’s Director of Communications and Liaison Department, Abdullahi Ismaila Ahmad in a statement to CAPITAL POST on Wednesday noted that the TAT sitting in Lagos had ordered MultiChoice Nigeria Limited to pay 50 per cent of N1.8 trillion tax backlog to the FIRS.
He maintained that FIRS discovered the backlog through a forensic audit, which allegedly showed that MultiChoice Nigeria Limited failed to pay to the government of Nigeria in past assessment years.
He said the five-member TAT, led by its chairman, Prof. A. B. Ahmed, issued the order following an application to it by the counsel to FIRS.
He stated that the counsel made the application under Order XI of the TAT Procedure Rules 2010, which requires MultiChoice or any other taxpayer who disputes their tax assessments to make the statutory deposit required under Paragraph 15(7) of the Fifth Schedule to the Federal Inland Revenue Service (Establishment) Act 2007 (FIRS Act).
“In certain defined circumstances to which the MultiChoice appeal fits, paragraph 15(7) of the fifth schedule to the FIRS (Establishment) Act 2007 requires persons or companies seeking to contest a tax assessment to pay all or a stipulated percentage of the tax assessed before they can be allowed to argue their appeal contesting the assessment at TAT.
“MultiChoice Nigeria Limited filed the matter at the Lagos TAT following its dispute over FIRS issuance of Notices of Assessment and Demand Note in the sum of N1,822,923,909,313.94k on April 7, 2021.
