In a statement, Andersen, a leading tax and business advisory firm, asked how the Federal Inland Revenue Service (FIRS) arrived at the N1.8 trillion assessment and urged both parties not to get caught up in a saga that could damage their reputations.
In faulting FIRS, Andersen claims that Nigeria contributes 10.19% to MultiChoice’s revenue. The firm’s viewpoint was outlined in a blog post on its website. The article, titled “Reputational Risks and Tax: MultiChoice as Case Study”, claimed that the FIRS may have used a flawed computational premise and created the appearance that it is biased against international companies doing business in Nigeria.
According to the firm, the FIRS’ claim that Nigeria accounts for 34 per cent of MultiChoice’s revenues, ahead of Kenya with 11 per cent and Zambia in third place with 10 per cent was misleading.
“Thus, the effective total revenue of Nigeria to the group is 10.19 per cent. It is arguable that 10.19 per cent is significantly different from 34 per cent of total revenue. However, one cannot help but question whether some other parameters in the computation of the alleged tax liability are also misleading,” Andersen stated.
Andersen further said that the FIRS’s press statement hints at partiality.
“The FIRS Chairman observed that the issue with tax collection in Nigeria, especially from foreign-based companies conducting businesses in Nigeria and making massive profits is frustrating and infuriating,” the agency said.