- The Federal Inland Revenue Service (FIRS) has secured the services of some commercial banks as agents to freeze and recover N1.8 trillion from accounts of MultiChoice Nigeria Limited (MCN) and MultiChoice Africa (MCA) over alleged continuous refusal to grant FIRS access to their servers for audit.
Abdullahi Ahmad, director, communications and liaison, FIRS, who issued the statement on behalf of the tax assessment service, explained that the decision to engage the banks was spurred by the companies’ prolonged breach of all agreements and undertakings with the service.
Muhammad Nami, executive chairman, FIRS, also said the companies would not promptly respond to correspondences, lacked data integrity and are not transparent as they continually deny FIRS access to their records.
Nami disclosed that MultiChoice Nigeria Limited particularly, has avoided giving the FIRS accurate information on the number of its subscribers and income, adding that the company is involved in the under-remittance of taxes which necessitated a critical review of its tax-compliance level.
The statement further described the level of non-compliance by Multichoice Africa (MCA), the parent company, as very alarming, noting that it had never paid Value Added Tax (VAT) since its inception.
“The issue with tax collection in Nigeria, especially from foreign-based companies conducting businesses in Nigeria and making massive profits, is frustrating and infuriating to the FIRS.
“Regrettably, companies come into Nigeria just to infringe on our tax laws by indulging in tax evasion. There is no doubt that broadcasting, telecommunications and the cable-satellite industries have changed the face of communication in Nigeria. However, when it comes to tax compliance, some companies are found wanting. They do with impunity in Nigeria what they dare not try in their countries of origin,” the statement read in part.
The FIRS chairman said information currently at the agency’s disposal has revealed a tax liability for relevant years of assessment for ₦1.8 trillion and $342.5 million.
“FIRS is powered in Section 49 of the Companies Income Tax Act Cap C21 LFN 2004 as amended, Section 41 of the Value Added Tax Act Cap V1 LFN 2004 as amended, and Section 31 of the FIRS (Establishment) Act No. 13 of 2007. With these relevant sections, all bankers to MCA and MCN in Nigeria are therefore appointed as Collecting Agents for the full recovery of the aforesaid tax debt,” he stated.
In this regard, he charged the affected banks to sweep balances in each of the above-mentioned entities’ accounts and pay the same in full or part settlement of the companies’ respective tax debts until full recovery.
He also enjoined the banks to swing into action before the execution of any transaction involving the companies or any of their subsidiaries, while the FIRS be informed of any transactions before execution on the account, especially transfers of funds to any of their subsidiaries.
“It is important that Nigeria puts a stop to all tax frauds that have been going on for too long and all companies must be held accountable and made to pay their fair share of relevant taxes, including back duty taxes owed especially VAT,” Nami said.
Frontpage February 14, 2020