Tax Appeal Tribunal orders Multichoice to pay N900bn Tax Backlog to FIRS

The Tax Appeal Tribunal on Tuesday has ordered Multichoice Nigeria Limited to pay 50% of the N1.8 trillion (i.e. N900 billion) which the Federal Inland Revenue Service is claiming as backlog of unpaid taxes to the Federal Government by Multichoice in past assessment years. In its submission, the FIRS had claimed that it determined the amount through forensic audit.

Mr Abdullahi Ahmad, the Director, Communications and Liaison Department of the FIRS, made this known in a statement in Abuja on Wednesday.

Ahmad explained that FIRS discovered the backlog through a forensic audit as it showed that Multichoice Nigeria Limited had failed to pay to the Government of Nigeria in past assessment years.

Counsel  for  FIRS  drew the attention of the Tribunal to  Paragraph 15(7) of the Fifth Schedule to the Federal Inland Revenue Service (Establishment) Act 2007 and urged the Tribunal to direct Multichoice  Nigeria Limited  to deposit with the FIRS 50 percent of the amount of the Assessment under Appeal  as security and a condition that must be fulfilled before the prosecution of the Appeal brought before TAT.

According to Ahmad, “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 7 April 2021.

“The amount constitutes what the FIRS calculated as due in taxation to the Federal Government of Nigeria from Multichoice after an investigation over several months to determine the extent to which Multichoice has been evading taxes in Nigeria,”

At Tuesday’s hearing of the matter in Appeal No: TAT/LZ/CIT/062/2021 19/08/2021 (Multichoice Nigeria Limited v. Federal Inland Revenue Service), Multichoice Nigeria Limited amended its Notice of Appeal and thereafter sought through its counsel, Bidemi Olumide of AO2 Law Firm for an adjournment of the proceedings to enable it to respond to the FIRS’ formal application for Accelerated hearing of the Appeal and prayer before the TAT directing Multichoice to produce before the Tribunal the integrated Annual report and Management Account Statements  of Multichoice  Group Ltd for Tax Years 2012 to 2020., among other prayers.

In response, however, the FIRS Counsel asked TAT to issue an order requiring that Multichoice makes the statutory deposit of 50% of the disputed sum.

“The counsel also prayed TAT to direct Multichoice to produce before the Tribunal the integrated Annual Report and Management Account Statements of Multichoice Group Ltd for Tax Years 2012 to 2020, among other prayers.

After hearing arguments from both sides, TAT upheld the FIRS Act and directed Multichoice Nigeria Limited to deposit with the FIRS the amount prescribed by the law, which is an amount equal to the tax charged upon Multichoice in the preceding year of assessment. Or one half of the tax charged by the assessment under appeal (whichever is lesser), plus a sum equal to 10 per cent of the said deposit as a condition precedent for further hearing of the Appeal.

TAT adjourned the Appeal to September 23, 2021 for the continuation of the hearing, subject to compliance with the Tribunal’s order.