The Tax Appeal Tribunal sitting in Lagos in a ruling today has struck out the appeal of Multichoice Africa Holdings B.V., the parent company of Multichoice Nigeria, where it challenged the assessment of the Federal Inland Revenue Service on it of unpaid VAT sums to the tune of over $123.7 Million.
The tribunal, delivering its judgment today, 22nd October 2021 upheld the preliminary objection of the FIRS against the appeal of Multichoice Africa Holdings B.V. stating that the South African company did not comply with Order 3 Rule 6 of the Tax Appeal Tribunal (Procedure) Rules, 2021, which requires that an appellant is to deposit half of the assessed amount it is disputing before it can be heard on appeal, and in addition to depositing the sum, the appellant is required to file along with its appeal an affidavit verifying the payment.
This sum is to be paid as a security for the hearing of any tax appeal. The rule states that “for an appeal against the tax authority, the aggrieved person will pay 50% of the disputed amount into designated account by the Tribunal before hearing as security for prosecuting the appeal”.
Multichoice Africa Holdings B.V. had been served a notice of assessment by the FIRS on unpaid VAT, challenged the assessment, and filed an appeal at the tribunal. It however failed to make the required deposit as stipulated by the Tribunal Rules.
With this ruling, the FIRS is expected to enforce the payment of the principal sum of $123.7 Million being unpaid VAT by Multichoice Africa Holdings B.V. as well as interest and penalty at $218 Million, totaling over $342 Million.
It is recalled that the FIRS had served Multichoice Africa Holdings B.V. a notice of assessment of unpaid VAT on the 16th of June 2021. The company had consequently appealed this assessment at the Tax Appeal Tribunal.
Reports show that Multichoice Africa Holdings, the parent company of Multichoice Nigeria, though providing services to its Nigerian arm has never paid Value Added Tax since inception.