MultiChoice Group, Africa’s largest cable TV company and owner of DSTV, has reached a tax settlement agreement with the Federal Inland Revenue Service (FIRS) in Nigeria.
The Nigerian subsidiary of MultiChoice will pay approximately $37.3 million as part of the resolution.
The announcement came in a statement released by MultiChoice on Thursday.
According to the statement, the agreement stipulates that MultiChoice Nigeria and MultiChoice Africa will collectively pay a total tax amount of N35.4 billion ($37.3 million), offsetting against security deposits and goodwill payments made to date.
This development follows the FIRS’s decision in 2022 to freeze MultiChoice Nigeria’s accounts after serving the company with a substantial tax claim of N1.8 trillion ($1.27 billion) for its Nigeria operation and an additional $342 million claim for value-added taxes.
In response to the FIRS’s actions, MultiChoice went to court to challenge the imposed penalty for tax evasion and the denial of auditors’ access to its servers.
In March 2022, MultiChoice and FIRS reached a resolution for their tax disputes, leading to the withdrawal of all ongoing lawsuits.
As part of the settlement, FIRS initiated a forensic systems audit of MultiChoice’s accounts on March 8, 2022, to determine the accurate tax liability.
The tax dispute resolution underscores the importance of transparency and compliance in the Nigerian business environment.
Approximately 34 percent of MultiChoice Group’s total revenue is generated from Nigeria, making it a critical market for the company. Kenya follows with 11 percent, and Zambia contributes around 10 percent.
Other African countries where MultiChoice operates make up the remaining 45 percent of the group’s total revenue, according to the company’s report.
