FIRS goes for N1.8tr tax liability from Multichoice coffers

The Federal Inland Revenue Service (FIRS) yesterday moved to recover N1.8 trillion from the accounts of MultiChoice Nigeria (MCN) Limited and MultiChoice Africa (MCA).

According to the revenue collector, some banks have been appointed to freeze the accounts of the Cable television service providers.

FIRS Director in charge of Communications and Liaison Department Abdullahi Ahmad said in a statement in Abuja that the appointment of banks as accounts freezing agents followed the groups’ refusal to grant the service access to their server for audit.

But MCN said the action taken by the FIRS was unnecessary because it is already in talks with the service.

The N1.8 trillion is said to be the taxes the companies owe Nigeria which contributes 34 per cent of their total revenue in Africa.

FIRS described the level of tax evasion by the two firms as “alarming,” adding that MCA has never paid a kobo to the Federal Government as Value Added Tax (VAT) since it began business in the country.

It also accused MCN of not “ giving accurate information on the number of its subscribers and income” in the country.

FIRS Executive Chairman Muhammad Nami said the decision was taken due to MCN’s persistent breach of agreements and undertakings with the revenue agency.

The FIRS statement was however silent on the number and names of the banks appointed to “sweep balances in each of the above-mentioned entities(MCA and MCN)’ accounts and pay the same in full or part settlement of the companies’ respective tax debts until full recovery.”

The statement reads: “All bankers to MCA and MCN in Nigeria have been appointed as Collecting Agents for the full recovery of the aforesaid tax debt”.

The agency further stated that the agent banks should notify it of “any transactions before execution on the account, especially transfers of funds to any of their subsidiaries.”

Faulting reasons for the FIRS action, MCN said apart from complying with the tax laws of Nigeria, it is in talks with the agency over the issue.

“MultiChoice Nigeria has not received any notification from FIRS. MultiChoice Nigeria respects and is comfortable that it complies with the tax laws of Nigeria. We have been and are currently in discussion with FIRS regarding their concerns and believe that we will be able to resolve the matter amicably,” Bamidele Johnson, spokesman for the cable television service provider said in a terse statement.

It added: “The companies persistently breached all agreements and undertakings with the Service, they would not promptly respond to correspondences, they lack data integrity and are not transparent as they continually deny FIRS access to their records.

“The companies are involved in the under-remittance of taxes which necessitated a critical review of their tax-compliance level.

“The group’s performance does not reflect in its tax obligations and compliance level in Nigeria. The level of non-compliance by MCA, the parent company of MCN is very alarming.”

FIRS lamented that “the issue with tax collection in Nigeria, especially from foreign-based companies conducting businesses in Nigeria and making massive profits is frustrating and infuriating.”

It said: “Regrettably, Companies come into Nigeria just to infringe on our tax laws by indulging in tax evasion. There is no doubt that broadcasting, telecommunications, and the cable-satellite industries have changed the face of communication in Nigeria. However, when it comes to tax compliance, some companies are found wanting. They do with impunity in Nigeria what they dare not try in their countries of origin”.

The statement further confirmed that Nigeria which contributes 34 percent of the total revenue of the Multi-Choice group is followed by Kenya with 11 percent.

Zambia contributes 10 percent while the rest of Africa where the group has presence accounts for 45 percent..

FIRS said apart from the ¦ 1.8 trillion unpaid tax by MCA and MCN, information at its disposal also revealed $342,531,206 tax liability for relevant years.

Faulting reasons for the FIRS action, MCN said apart from complying with the tax laws of Nigeria, it is in talks with the agency over the issue.

“MultiChoice Nigeria has not received any notification from FIRS. MultiChoice Nigeria respects and is comfortable that it complies with the tax laws of Nigeria. We have been and are currently in discussion with FIRS regarding their concerns and believe that we will be able to resolve the matter amicably,” Bamidele Johnson, spokesman for the cable television service provider said in a terse statement.