Tax Evasion Appeal: Tribunal Orders Multichoice To Pay FIRS N900bn Deposit

The Tax Appeal Tribunal sitting in Lagos has ordered Multichoice Nigeria Limited to pay the sum of N900 billion as deposit, Federal Inland Revenue Service (FIRS) said on Wednesday.

FIRS spokesman, Dr Abdullahi Ahmad, explained that the money was 50 per cent of the N1.8 trillion which the revenue had determined through a forensic audit to be the amount in taxes that Multichoice – owners of DSTV – failed to pay to the Nigerian Government in past assessment years.

According to him, a five-member Tax Appeal Tribunal (TAT) led by its Chairman, Professor A.B. Ahmed, issued the order following an application to it by the counsel to FIRS.

“The FIRS counsel made the application under Order XI of the TAT Procedure Rules 2010 which enables a party to make an application at any stage of the proceedings,” Ahmad said.

“Counsel to 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 urge the Tribunal to direct Multichoice Nigeria Limited to deposit with the FIRS 50 per cent 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.

“In certain defined circumstances to which the Multichoice appeal fits, Paragraph 15(7) of the Fifth Schedule to the Federal Inland Revenue Service (Establishment) Act 2007 (FIRS Act) 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, according to the FIRS spokesman, filed the case at the Lagos TAT following its dispute over the agency’s issuance of Notices of Assessment and Demand Note in the sum of N1,822,923,909,313.94 on April 7.

He said the amount was what the FIRS calculated as due in taxation to the government of Multichoice after an investigation over several months to determine the extent to which the company has been evading taxes in Nigeria.

“At the 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,” Ahmad said.

He added that in response, the FIRS counsel asked TAT to issue an order directing Multichoice to make the statutory deposit of 50% of the disputed sum.

After hearing arguments from both sides, TAT upheld the FIRS submission and directed Multichoice to deposit with the FIRS 50 per cent of the assessment under the appeal.

The company was also asked to pay 10 per cent % of the deposit as a condition precedent for further hearing of the appeal.

Thereafter, TAT adjourned the appeal to September 23 for report of compliance with its order and continuation of the hearing, subject to compliance with the Tribunal’s order.