A tax consultant, Mr. Bonaventure Amuzie, has described the tax dispute between the Federal Inland Revenue Service (FIRS) and pay television company, MultiChoice Nigeria, as needless and capable of reducing taxpayer confidence in the country’s tax system.
Amuzie, who made his views known in a press statement issued in Lagos on Friday, said there are big question marks on how the revenue body arrived at the N1.8 trillion tax liability it alleges that MultiChoice has.
“I am an advocate of strict tax compliance and I desire to see the tax affairs of every business in the country put under scrutiny, scientifically. But the way FIRS came up with the figure it attributed to MultiChoice is anything but scientific. The consultants hired by the FIRS to carry out an audit just manufactured figures that look very illiterate. I am not sorry to say,” he said.
Amuzie, who said he has followed the proceedings at the Tax Appeal Tribunal (TAT), where MultiChoice is contesting the liability, explained that the parameters used by the FIRS compute the figures are unreliable.
“An agency like the FIRS, which seeks to earn the trust of taxpayers, should not have claimed that Nigeria accounts for 34% of the total earnings of the MultiChoice Group. The figure quoted is one that can be easily debunked and has been debunked, notably by a major tax consultancy, Andersen, which showed that Nigeria contributes 10.19 per cent to MultiChoice’s revenue base, 34 per cent,” he said.
The tax consultant said Andersen referenced the MultiChoice Group’s audited financial statements for 2019, which showed that Nigeria accounted for only 34 per cent of the group’s revenues across the rest of the continent (excluding South Africa).
“The rest of Africa, according to credible data, accounts for 29.6 per cent of the MultiChoice Group’s revenues. So, where did the FIRS get its figures from?” he asked.
Amuzie slammed FIRS, describing it as incompetent, for claiming that part of MultiChoice Nigeria’s revenues come from outside the country. He explained that the company does not provide services to other countries and therefore has no basis to be paid from outside Nigeria.
“MultiChoice has operations in almost all African countries, so on what basis will Ghanaians, who have MultiChoice Ghana, for example, be paying to MultiChoice Nigeria? It is also laughable that the FIRS, which wants to be taken seriously, does not understand that payment channels used by MultiChoice to receive payments from users of its services will be paying money to MultiChoice. Quickteller and Interswitch, which the FIRS listed as some of the third parties paying MultiChoice, are nothing more than payment channels. They contribute nothing to the company’s coffers,” he said.
Amuzie also noted that local television channels carried by MultiChoice on its platforms were listed among third parties paying the company and described the use of such as computational basis as working towards a predetermined end.
“To do that is worse than poor, but it is less grave than the FIRS’ decision to also use MultiChoice dealers’ revenues as a basis for tax liability computation. Dealers are separate from MultiChoice and I do not think it makes sense, as the FIRS claimed to have done, to have used their figures to compute tax indebtedness,” he said.
He warned that companies will view the experience of MultiChoice in the hands of the FIRS as an unfair attack that will shape their attitude to tax compliance. He wondered how it is possible to rack up a tax bill of N1.8 trillion, asking whether the FIRS just came into existence.