The biggest Pay TV provider in Africa, MultiChoice, reportedly settles a $37M tax dispute with Nigerian authorities.
MultiChoice Reportedly Settles a $37M Tax Dispute with Nigerian Authorities
Back in 2022, Nigeria’s Federal Inland Revenue Service (FIRS) hit MultiChoice with enormous tax assessments totaling more than $1.5 billion and blocked the company’s local accounts. MultiChoice was charged by the FIRS with missing data integrity, being opaque, and preventing tax officials from seeing its financial records.
After initiating negotiations with the FIRS, MultiChoice subsequently filed a lawsuit to reverse the penalty but later backed out of the case. The $37.3 million settlement will be subtracted from current security deposits and amounts already paid in good faith, per MultiChoice.
The FIRS justified the initial severe sanctions by describing MultiChoice’s non-compliance levels as concerning. The holding business MultiChoice Africa was specifically criticized by the Service for never having filed a VAT return since it began operating in Nigeria many years ago.
With a 34% revenue share, Nigeria is MultiChoice Group’s top revenue generator. Kenya and Zambia are distantly behind. According to the FIRS, this substantial presence should require larger tax payments.
MultiChoice Seems Determined to Mend Fences With Powerful Nigerian Regulators
MultiChoice subsequently gave up to FIRS’s demands for a forensic audit after deciding not to pursue legal action. Though the final assessed liabilities turned out to be significantly less than the original figures of $1.3 billion, the review most certainly verified instances of nonpayment.
Now that the tensions have subsided and the tax payments have returned to normal, MultiChoice seems determined to mend fences with powerful Nigerian regulators. As part of its recent announcement to address policymakers’ concerns about tracking digital economic activity, the corporation revealed plans to crack down on the sharing of streaming accounts in Nigeria.
MultiChoice Can Now Focus on Growing its Technology Business in Areas Like Showmax
Nigeria’s sizable and expanding customer base further guarantees that keeping the massive pay TV and streaming company’s operating license is crucial. With a concrete resolution to end a contentious tax battle, MultiChoice can now concentrate on growing its technology business in areas like its streaming service Showmax.
Now that the tax matter has been resolved, MultiChoice can once more focus on the rapidly evolving African media scene. Leading the continent in pay TV, it must strike a balance between maintaining global franchises through distribution agreements and prioritizing local programming, such as Nollywood movies.
Increasing local expenditures and partnerships is another strategy to avoid future confrontations with tax authorities that are apprehensive about what they see as undue profit extraction.
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