Sylvia Duruson
Africa’s leading pay TV provider MultiChoice has agreed to pay $37.3 million to Nigerian tax officials, concluding a lengthy dispute over unremitted taxes. The settlement stems from allegations of significant past nonpayment by MultiChoice Nigeria and its parent company MultiChoice Africa.
In 2022, Nigeria’s Federal Inland Revenue Service (FIRS) froze local MultiChoice accounts and slapped the company with massive tax assessments exceeding $1.5 billion. The FIRS accused MultiChoice of non-transparency, lacking data integrity, and denying tax authorities access to financial records.
MultiChoice subsequently sued to overturn the penalties but later withdrew legal actions upon starting negotiations with the FIRS. Per MultiChoice, the $37.3 million settlement will be deducted from existing security deposits and good faith amounts already paid.
The FIRS described non-compliance levels by MultiChoice as alarming in justifying the initial harsh fines. In particular, the Service called out the holding company MultiChoice Africa for never submitting VAT payments since initiating Nigerian operations years ago.
Nigeria generates the highest 34% revenue share for MultiChoice Group, followed distantly by Kenya and Zambia. The FIRS suggested this significant presence should necessitate fuller tax contributions.
After dropping lawsuits, MultiChoice eventually acquiesced to FIRS demands for a forensic audit. The review likely confirmed instances of nonpayment, though final assessed liabilities proved dramatically below original amounts near $1.3 billion.
With tensions now diffused and tax payments restored to acceptable standards, MultiChoice appears intent on rebuilding rapport with influential Nigerian regulators. The company recently announced plans to crack down on streaming account sharing in Nigeria, catering to policymaker priorities around capturing digital economic activity.
Nigeria’s large and growing subscriber base also ensures maintaining the pay TV and streaming giant’s operative license remains essential. By closing an acrimonious tax fight with a tangible settlement, MultiChoice can redirect focus to technology growth areas like its Showmax streaming service.
With the tax dispute settled, MultiChoice can aim attention again at the fast-changing African media landscape. As the continent’s pay TV leader, it must balance regional content priorities like Nollywood films with keeping global franchises through carriage deals.
Bolstering local partnerships and spending also represents a pathway to steer clear of future standoffs with tax authorities wary of perceived excessive profit extraction.
