South African Company, Multichoice Africa Holdings B.V. has lost the appeal to pay N194Billion tax to the federal government of Nigeria.
The Tax Appeal Tribunal has struck out the enduring legal tussle between South African Company, Multichoice Africa Holdings B.V., and the Nigerian government-owned Federal Inland Revenue Services (FIRS) over the disputed $342 million (about N194 billion) tax.
The Tax Appeal Tribunal struck out the appeal instituted by the company for want of diligent prosecution and ordered Multichoice Africa Holdings B.V. to pay up the $342 million tax assessment handed over to it by the FIRS.
Multichoice Africa Holdings who is the parent company of Multichoice Nigeria had 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.
In the delivery of the judgement on the appeal filed by the company, the tribunal upheld the preliminary objection of the FIRS against the appeal of Multichoice Africa Holdings B.V.
The Tribunal further 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.
Aside depositing the sum, the Tribunal ordered the appellant 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.”
On June 16, 2021, FIRS 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.
The Company, however, failed to comply with provisions of tax laws by refusing to make the required deposit as stipulated by the Tribunal Rules.
With the Tribunal 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.
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. The company had appealed the assessment at the Tax Appeal Tribunal on the ground of being too excessive.