Multichoice shares gain after Nigerian tax issues get clarified

MULTICHOICE’S shares on the JSE recovered to gain 7 percent in late trade yesterday after the entertainment group clarified that it did not have to pay as hefty a tax payment to the Nigerian Federal Inland Revenue Service (Firs) as media reports this week suggested.

It said MultiChoice Nigeria had noted the media statement on the Tax Appeal Tribunal (Tat) appeal hearing held on August 24.

“The direction issued by the Tat does not compel MultiChoice Nigeria to make payment of 50 percent of 1.8 trillion naira (R65 billion), being half of the disputed tax assessment which is under appeal,” it said.

Instead it said the direction issued by the Tat required MultiChoice Nigeria to deposit with Firs an amount equal to the tax paid by MultiChoice Nigeria in the preceding year of assessment, or one half of the disputed tax assessment under appeal, whichever was the lesser amount plus 10 percent.

The lesser amount is the tax paid by MultiChoice Nigeria in the previous assessed year, which is substantially less than the disputed assessment.

MultiChoice Nigeria was a law-abiding corporate citizen and continued to engage constructively with the Firs in an attempt to resolve this matter, it said.

The Firs said in July it had instructed banks to freeze the accounts of MultiChoice because the company had refused to grant access for the tax auditors to its servers.

Nigeria’s Firs executive chairperson, Muhammad Nami, reportedly issued the directive after the companies allegedly failed to grant the authority access to their records.

“Particularly, MCN has avoided giving the Firs accurate information on the number of its subscribers and income,” Nami reportedly said. “The companies are involved in the under-remittance of taxes which necessitated a critical review of the tax-compliance level of the company.”

The tax tribunal adjourned the case until September 23, subject to the company complying with its order, the Firs said.