Nigeria’s Federal Inland Revenue Service (FIRS) on Thursday said that it had instructed banks to freeze the accounts of media entertainment firm MultiChoice Africa and its Nigerian subsidiary for breaching agreements and denying access to their records for auditing. The firms are part of South African-headquartered MultiChoice Group, which provides television and other entertainment services across Africa. MultiChoice Group, spun off in 2019 from Naspers, makes a third of its revenues from its business elsewhere on the continent outside South Africa and Nigeria is its biggest market in that segment, the company said in its annual report.
The banks would have to recover ₦1.8-trillion naira (R63-billion) in outstanding tax obligations from MultiChoice Africa and MultiChoice Nigeria, the Federal Inland Revenue Service (Firs) said in a statement. “It was discovered that the companies persistently breached all agreements and undertakings with the service, they would not promptly respond to correspondences, they lacked data integrity, and are not transparent as they continually deny Firs access to their records,” the tax agency said.
Shares in MultiChoice, which denied the accusations and said the issue could be resolved amicably, fell more than 5% in Johannesburg on Tuesday after the Nigeria news broke. They were last quoted down 6% at R112.66. and this recent case follows another dispute in 2018 involving South African mobile operator MTN Group whose Nigerian unit was ordered to pay $2 billion in taxes relating to imports and other payments from 2007 to 2017. The demand was later dropped.
MultiChoice Group said in an e-mailed response to a request for comment that it has read the media reports and the statements made by Firs. “MultiChoice Nigeria has not received any notification from Firs,” it said in remarks that were also published on the JSE’s stock exchange news service. “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.”
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