Why FIRS wants to freeze Multichoice’s account– Chairman FIRS
The Federal Inland Revenue Service (FIRS) has accused MultiChoice Nigeria Limited and MultiChoice Africa owners of DSTV of N1.8 trillion tax fraud stating that it has appointed some commercial banks to freeze and recover the debt from their account.
The Director of Communications and Liaison of FIRS, Abdullahi Ahmad released a statement titled, ‘Federal Inland Revenue Service (FIRS) Appoints Commercial Banks to Freeze and Recover N1.8 trillion from the Accounts of Messrs Multi-Choice Nigeria Limited (MCN) and Multichoice Africa (MCA)’ signed by the Executive Chairman of the FIRS, Muhammad Nami on Thursday.
In the statement, FIRS said the decision to appoint the banks as agents and to freeze the accounts was a result of the group’s continued refusal to grant FIRS access to its servers for audit.
The tax office said “It was discovered that the companies persistently breached all agreements and undertakings with the Service, they would not promptly respond to correspondences, they lack data integrity and are not transparent as they continually deny FIRS access to their records.
“Particularly, MCN has avoided giving the FIRS accurate information on the number of its subscribers and income.
“The companies are involved in the under-remittance of taxes which necessitated a critical review of the tax-compliance level of the company.
FIRS in the statement stated that the group’s performance does not reflect in its tax obligations and compliance level in Nigeria.
“The level of non-compliance by Multi-Choice Africa (MCA), the parent Company of Multi-Choice Nigeria (MCN) is very alarming. The parent company, which provides services to MCN has never paid Value Added Tax (VAT) since its inception.”
The information currently at the disposal of the FIRS, the MultiChoice group and Messrs MultiChoice Nigeria Limited have a tax liability for relevant years of ₦1,822,923,909,313.94 and $342,531,206.
It added that, “Under FIRS powers 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, all bankers to MCA & MCN in Nigeria were therefore appointed as Collecting Agents for the full recovery of the aforesaid tax debt.”
Therefore all the affected banks were required 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.
The FIRS further directed the banks to carry out the sweep balances before the execution of any transaction involving the companies or any of their subsidiaries, adding that the Service should be informed of any transactions before execution on the account, especially transfers of funds to any of their subsidiaries.