FIRS Goes After Multichoice, Mandates Banks to Recover N1.82trn Tax Debt

By James Emejo

The Executive Chairman, Federal Inland Revenue Service (FIRS), Mr. Muhammad Nami, Thursday said the service had appointed some commercial banks as agents to recover the sum of N1.82 trillion from accounts of Messrs Multi-Choice Nigeria Limited (MCN) and Multi-Choice Africa (MCA).

He said the decision to appoint the banks as agents and to freeze the affected accounts was as a result of the group’s continued refusal to grant FIRS access to its servers for audit.

According to him, it was discovered that the companies persistently breached all agreements and undertakings with the service and would not promptly respond to correspondences.

Nami, in a statement by Director, Communications and Liaison Department, FIRS, Abdullahi Ahmad, said Multi-choice, the owners of DSTV, “lacked data integrity and are not transparent as they continually deny FIRS access to their records”.
Nami stressed that it was important that Nigeria puts a stop to all tax frauds which had been going on for too long.
He said all companies must be held accountable and made to pay their fair share of relevant taxes including back duty taxes owed, especially VAT for which they were ordinarily agents of collection.

Specifically, he said MultiChoice Nigeria had avoided giving the FIRS accurate information on the number of its subscribers and income.”
He also accused the companies of being involved in the under-remittance of taxes which necessitated a critical review of the tax-compliance level of the company.
The statement also pointed out that the group’s performance did not reflect in its tax obligations and compliance level in Nigeria.

Nami said:”The level of non-compliance by Multi-Choice Africa (MCA), the parent Company of Multi-Choice Nigeria (MCN) is very alarming. The parent company, which provides services to MCN has never paid Value Added Tax (VAT) since its inception.
“The issue with tax collection in Nigeria, especially from foreign-based companies conducting businesses in Nigeria and making massive profits is frustrating and infuriating to the Federal Inland Revenue Service (FIRS).

“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.”
He said:”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.”

According to the FIRS, Nigeria contributes 34 per cent of total revenue for the Multi-Choice group followed by Kenya with 11 per cent and Zambia with 10 per cent.
The rest of Africa where they have presence accounts for 45 per cent of the group’s total revenue, he added.

Nami said information currently at the disposal of the service revealed a tax liability of N1.822 trillion for relevant years of assessment including $342.53 million.
He explained that “Under the FIRS powers in Section 49 of the Companies Income Tax Act Cap C21 LFN 2004 as amended, Section 41 of the Value Added Tax Act Cap V1 LFN 2004 as amended and Section 31 of the FIRS (Establishment) Act No. 13 of 2007, all bankers to MCA and MCN in Nigeria were therefore appointed as Collecting Agents for the full recovery of the aforesaid tax debt.”
He added:”In this regard, the affected banks are required to sweep balances in each of the above-mentioned entities’ accounts and pay the same in full or part settlement of the companies’ respective tax debts until full recovery.

“This should be done before the execution of any transaction involving the companies or any of their subsidiaries. It is further requested that the Federal Inland Revenue Service be informed of any transactions before execution on the account, especially transfers of funds to any of their subsidiaries.”