Tax Evasion: Pay N900bn To FG Before Commencement Of Appeal, Tribunal Orders DSTV

A Tax Appeal Tribunal (TAT) sitting in Lagos has ordered Multichoice Nigeria Limited, owners of popular cable television services, DSTV, to pay 50 per cent of N1.8trn which the Federal Inland Revenue Service (FIRS) has determined through a forensic audit to be the amount in taxes that Multichoice Nigeria Limited had failed to pay to the Government of Nigeria in past assessment years.

The 50 per cent of the N1.8trn translates to the sum of N900bn.

A statement on Wednesday from Abdullahi Ismaila Ahmad, Director, Communications and Liaison Department of the FIRS, explained that the five-member TAT led by its Chairman, Professor A.B. Ahmed, issued the order following an application to it by the Counsel to FIRS.

The Counsel made the application under Order XI of the TAT Procedure Rules 2010 which requires Multichoice, or any other taxpayer who disputes their tax assessments, to make the statutory deposit required under Paragraph 15(7) of the Fifth Schedule to the Federal Inland Revenue Service (Establishment) Act 2007 (FIRS Act) as a condition that must be fulfilled before the prosecution of the appeal brought before TAT.

In certain defined circumstances to which the Multichoice appeal fits, Paragraph 15(7) of the Fifth Schedule to the Federal Inland Revenue Service (Establishment) Act 2007 (FIRS Act) requires persons or companies seeking to contest a tax assessment to pay all or a stipulated percentage of the tax assessed before they can be allowed to argue their appeal contesting the assessment at TAT.

Multichoice Nigeria Limited filed the matter at the Lagos TAT following its dispute over FIRS’ issuance of Notices of Assessment and Demand Note in the sum of N1, 822, 923,909,313.94k on 7 April 2021.

The amount constitutes what the FIRS calculated as due in taxation to the Federal Government of Nigeria from Multichoice after an investigation over several months to determine the extent to which Multichoice has been evading taxes in Nigeria.

At Tuesday’s hearing of the matter in Appeal No: TAT/LZ/CIT/062/2021 19/08/2021 (Multichoice Nigeria Limited v. Federal Inland Revenue Service), Multichoice Nigeria Limited amended its Notice of Appeal and thereafter sought through its Counsel, Bidemi Olumide of AO2 Law Firm for an adjournment of the proceedings.

This will enable it to respond to the FIRS’ formal application for accelerated hearing of the appeal and prayer before the TAT to order Multichoice to produce DSTV’s revenue and subscriber database, among other prayers.

In response, however, the FIRS Counsel asked TAT to issue an order requiring that Multichoice makes the statutory deposit of 50 per cent of the disputed sum.
After hearing arguments from both sides, TAT upheld the FIRS Act and directed Multichoice Nigeria Limited to deposit with the FIRS the amount prescribed by the law, which is an amount equal to the tax charged upon Multichoice in the preceding year of assessment.

The amount is also one half of the tax charged by the assessment under appeal (whichever is lesser), plus a sum equal to 10 per cent of the said deposit as a condition precedent for further hearing of the Appeal.

Thereafter, TAT adjourned the Appeal to 23 September 2021 for the continuation of the hearing, subject to compliance with the Tribunal’s order.