The Federal Inland Revenue Service has designated commercial banks to recover N1.8 trillion from Messrs MultiChoice Nigeria Limited and MultiChoice Africa.
The appointment was confirmed in a statement signed by the FIRS’ Executive Chairman, Muhammad Nami, who outlined the reasons for the decision, which included the group’s continued refusal to grant FIRS access to its servers for audit, the companies’ persistent breach of agreements and undertakings with the Service, and under-remittance of taxes, among other things.
In a statement issued on Thursday by the Service’s Director of Communications and Liaison, Abdullahi Ahmad, titled ‘Federal Inland Revenue Service (FIRS) Appoints Commercial Banks to Freeze and Recover N1.8 Trillion from Messrs Multi-Choice Nigeria Limited (MCN) and Multichoice Africa (MCA).’
“The FIRS has engaged various commercial banks as agents to recover the sum of N1.8 trillion from the accounts of Messrs MultiChoice Nigeria Limited (MCN) and MultiChoice Africa Limited” (MCA).
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The statement confirmed that the decision to appoint the banks as agents and to freeze the accounts as a result of the group’s continued refusal to grant FIRS access to its servers for audit.
It was discovered that the companies persistently breached all agreements and undertakings with the Service, they would not promptly respond to correspondences, they lack data integrity and are not transparent as they continually deny 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 group’s performance, according to the statement, is not reflected in its tax responsibilities or compliance level in Nigeria.
“The level of noncompliance by Multi-Choice Africa (MCA), the parent company of Multi-Choice Nigeria (MCN), is quite concerning. Since its establishment, the parent firm that supplies services to MCN has never paid Value Added Tax (VAT).”
According to the statement, the MultiChoice group and Messrs MultiChoice Nigeria Limited have a tax liability for relevant years of $1,822,923,909,313.94 and $342,531,206, respectively, based on information currently available to the FIRS.
“Under FIRS 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,” the statement added.
As a result, all impacted banks were obligated to sweep balances in each of the above-mentioned entities’ accounts and pay the same in full or part payment of the companies’ respective tax arrears until FULL recovery was achieved.