MultiChoice Nigeria urged to negotiate on tax settlement
ICT and telecommunications market analysts in Nigeria have urged regional and international IT companies in the country to “negotiate” settlements with President Muhammadu Buhari’s administration. This follows the latest Tax Appeal Tribunal directive to MultiChoice to pay a portion of an outstanding US$4.3-billion tax bill.
Media reports have emerged detailing the Tribunal’s directive and MultiChoice’s insistence that the directive “does not compel MultiChoice Nigeria to make a payment of 50% of N1.8-trillion, being half of the disputed tax assessment, which is under appeal.”
After Twitter, MultiChoice has become the latest foreign company in the country to fall out of favour with the government.
The US$4.3-billion tax bill relates to allegations the company under-declared taxes and refusal to allow revenue officers access to its servers.
While earlier news reports indicated that the company had been directed to pay US$2.2-billion in tax arrears to the Federal Inland Revenue Service (FIRS), the pay television company has said in the past few hours that it is only required to pay an amount equal to the total it paid in its preceding year of assessment.
A statement by the company reads: “The direction issued in accordance with the Fifth Schedule to the FIRS 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%.”
According to MultiChoice Nigeria, the “lesser amount is the tax” it paid in the previous assessed year “which is substantially less” than the disputed assessment.
It did not provide further details nor did it outline how much it had paid in its preceding year of assessment.
Economist and financial adviser, Folorunso Ayo Dada, said, “Negotiation and proper arrangement seem to be the way out of tax issues in Nigeria. I think MultiChoice should have engaged better before it got to this. I believe they can still open talks and pay far less than this bogus amount quoted.”
In July, revenue authorities in Nigeria directed local banks to freeze financial accounts for MultiChoice Nigeria over the tax dispute.
Other IT companies in Nigeria are also likely to face fresh taxes and fiscal demands linked to the National Information Technology Development Agency (NITDA)’s desire to license, levy taxes on pre-tax income, as well as sanction IT companies.