According to BMA sources, the Nigerian tax tribunal has granted MultiChoice Group permission to appeal a disputed US$4.4 billion tax charge. BMA sources confirmed that Multichoice was allowed to proceed with the appeals process after agreeing to pay a US$ 19.3 million deposit.
The appeals decision came as a relief to the South African headquartered corporation, which Nigerian tax officials had told in August that it would have to pay half of the claim, or US$2.2 billion, to plead its case.
MultiChoice is contesting a penalty levied by the Nigerian Federal Inland Revenue Service, which claimed that the DStv service’s owner evaded taxes and denied auditors access to the company’s servers. The US$4.4 billion allegations are far more than the company’s current market worth of about US$3.8 billion.
MTN Group, Nigeria’s largest mobile phone provider, has worked on an appeal of a substantial tax charge in the country, waging many multibillion-dollar disputes with the country’s authorities. Among them was a US$2 billion tax bill introduced in 2018, which was then repealed more than a year later.
Nigeria’s finance minister, Zainab Ahmed, stated last week that the country is working to improve tax compliance to address income gaps. As a result, the government wants to increase its revenue-to-GDP ratio to 15 per cent by 2025, up from 8 per cent currently.
Rising debt-service costs, which now account for almost 70 per cent of government revenue, are limiting the amount of money the government can spend on critical infrastructure.