The Federal Inland Revenue Service, FIRS, is set to recover from the accounts of Multi-Choice Nigeria Limited, MCN, and Multi-Choice Africa, the sum of N1.8 trillion.
This is as it also disclosed the plan to freeze the group’s accounts.
FIRS, according to a statement signed by its chairman, Muhammad Nami, had appointed some commercial banks as agents to carry out the exercise.
The statement confirmed that the decision to appoint the banks as agents and to freeze the accounts was as a result of the group’s continued refusal to grant FIRS access to its servers for audit.
It said that it was discovered that the companies persistently breached all agreements and undertakings with the Service.
Pointing out that the group would not promptly respond to correspondences, FIRS said they lacked data integrity and were not transparent as they continually denied it (FIRS) access to their records.
“Particularly, MCN has avoided giving the FIRS accurate information on the number of its subscribers and income. The companies are involved in the under-remittance of taxes which necessitated a critical review of the tax-compliance level of the company,” the statement reads in part.
FIRS added that the group’s performance did not reflect in its tax obligations and compliance level in Nigeria.
The statement reads in part:
“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. 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.”
FIRS said, “Nigeria contributes 34% of total revenue for the Multi-Choice group. The next to Nigeria from intelligence gathering is Kenya with 11%, and Zambia is in 3rd place with 10%. The rest of Africa where they have presence accounts for 45% of the group’s total revenue.”
FIRS said information currently at its disposal of FIRS had revealed a tax liability for relevant years of assessment for ₦1,822,923,909,313.94 (One trillion, eight hundred and twenty-two billion, nine hundred and twenty-three million, nine hundred and nine thousand, three hundred and thirteen naira, ninety-four kobo only) and $342,531,206 (Three hundred and forty-two million, five hundred and thirty-one thousand, two hundred and six dollars only).
It said under its 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 & MCN in Nigeria were therefore appointed as Collecting Agents for the full recovery of the aforesaid tax debt.
It said that it was in that regard that the affected banks were 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.
FIRS said the exercise should be done before the execution of any transaction involving the companies or any of their subsidiaries.
It 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.
Nami, FIRS chairman concluded that it was important that Nigeria put a stop to all tax frauds that 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.
