MultiChoice denies having to pay R33bn to Nigerian tax authorities, shares skyrocket

Naspers spin-off MultiChoice has been under fire from Nigerian tax authorities with the Federal Inland Revenue Service stating that Africa’s largest television provider has to pay 50% of a R66bn fine. To put this into perspective, MultiChoice’s market capitalisation is approximately R50bn. It seems obscene but it possibly shouldn’t come as a surprise given the troubles JSE-listed companies have had doing business in Africa’s largest economy. Heavyweights Shoprite, MTN and Tiger Brands have all had its troubles searching for growth in Nigeria. MultiChoice released an announcement to the market (see below for ease of reference) denying that is has to pay such an amount, which has sent its shares skyrocketing on the local bourse today. – Justin Rowe-Roberts

MultiChoice SENS statement: 

Nigerian Federal Inland Revenue Service

Shareholders are referred to the SENS announcement of 8 July 2021 regarding media reports on an ongoing tax matter with the Nigerian Federal Inland Revenue Service (FIRS). MultiChoice Nigeria has noted todays media statement on the Tax Appeal Tribunal (“TAT”) appeal hearing held on 24 August 2021.

The direction issued by the TAT does not compel MultiChoice Nigeria to make payment of 50% of N1,8trn, being half of the disputed tax assessment which is under appeal.

The direction 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%. 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.

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