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South African Firm, Multichoice Loses Appeal, Ordered To Pay N194Billion Tax To Nigeria

October 26, 2021

The Tax Appeal Tribunal on Tuesday struck out the appeal instituted by the company for want of diligent prosecution and ordered it to pay up the $342 million tax assessment handed over to It by the FIRS, Daily Post reports.

The enduring legal tussle by the South African Company, Multichoice Africa Holdings B.V with the Nigerian government-owned Federal Inland Revenue Services (FIRS) over the disputed $342 million (about N194 billion) tax has been struck out.

 

The Tax Appeal Tribunal on Tuesday struck out the appeal instituted by the company for want of diligent prosecution and ordered it to pay up the $342 million tax assessment handed over to It by the FIRS, Daily Post reports.

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Multichoice Africa Holdings is the parent company of Multichoice Nigeria and has engaged FIRS in a fierce legal battle to challenge the assessment of the FIRS on its unpaid Value Added Tax (VAT) amounting to over $123.7 million.

 

The tribunal while delivering its judgment on the appeal filed by the company upheld the preliminary objection of the FIRS against the appeal of Multichoice Africa Holdings B.V.

 

The Tribunal affirmed that the South African company did not comply with Order 3 Rule 6 of the Tax Appeal Tribunal (Procedure) Rules, 2021, which stipulates that an appellant is to deposit half of the assessed amount it is disputing before it can be heard on appeal.

 

In addition to depositing the sum, the appellant is expected to file along with its appeal an affidavit verifying the payment which the company also failed to comply with.

 

According to the Tribunal, the sum is to be paid as a security for the hearing of any tax appeal. The rule states that “for an appeal against the tax authority, the aggrieved person will pay 50% of the disputed amount into designated account by the Tribunal before hearing as security for prosecuting the appeal."

 

FIRS had served a notice of unpaid VAT on Multichoice Africa Holdings B.V. but the company vehemently challenged the assessment and filed an appeal at the tribunal.

 

It, however, failed to comply with provisions of tax laws by the refusal to make the required deposit as stipulated by the Tribunal Rules.

 

With the ruling, the FIRS is expected to enforce the payment of the principal sum of $123.7 million being unpaid VAT by Multichoice Africa Holdings B.V. as well as interest and penalty at $218 million, totalling over $342 million.

 

The FIRS had served Multichoice Africa Holdings B.V. a notice of assessment of unpaid VAT on June 16,  2021.
 

The company had consequently appealed the assessment at the Tax Appeal Tribunal on the ground of being too excessive.

 

Multichoice Africa Holdings, the parent company of Multichoice Nigeria, though, providing services to its Nigerian arm was said not to have paid Value Added Tax since inception.

 

Topics
Taxes