The Federal Inland Revenue Service (FIRS) and the MultiChoice Group Ltd. have reached an out-of-court agreement over $4.4 billion tax disputes, the FIRS stated in a statement released on Wednesday in Abuja.
In the agreement reached, Africa’s biggest pay-TV provider will allow FIRS to conduct a forensic audit of MultiChoice’s accounts to determine the organisation’s tax liability while the South African company will withdraw all pending lawsuits, Investors King has learnt.
MultiChoice had approached the Federal High court in 2021 to challenge the penalty imposed by the agency, which claimed the owner of DSTV denied FIRS auditors access to its servers and skipped tax payments.
Tax evasion-related issue is not new between FIRS and foreign companies operating in Nigeria, the agency had dragged MTN Nigeria to court for a similar reason a few years ago.
MTN reportedly paid more than $1 billion in fines and agreed to list its Nigerian business unit on the Nigerian Exchange Limited after it was accused of cancelling subscriptions of people without proper registrations in 2016, though it did not pay fines over tax and the illegal repatriation of the fund.
On Tuesday, Investors King had reported that FIRS gave a one-month window to companies with dollar outstanding tax liabilities to pay in Naira due to forex shortage.
MultiChoice’s shares gained 9.2% since the initial tax claim some eight months ago and on Wednesday extended gains by 2.1% to push its market capitalisation to $3.6 billion.