MultiChoice ordered to pay back taxes

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MultiChoice Group Ltd has been ordered by a Nigerian court to pay 50% of a contested tax bill of 1.8 trillion naira ((65 billion rand)), the latest crisis facing a South African company in the most populous country on the continent.

Shares of Africa’s largest pay-TV provider fell after Nigeria’s Federal Inland Revenue Service imposed the penalty as a condition of an appeal to a Lagos court. The stock fell 8% at the Johannesburg close on Wednesday, approaching 11-month lows.

MultiChoice disputes how much it owes – saying it owes much less – and continues to engage with authorities, the company said in an emailed statement. The company is the operator of DSTV, a satellite television provider in sub-Saharan Africa.

“The market needed faster communication from MultiChoice because they don’t know what the position of the company is and how serious the situation is,” said Greg Davies, fund manager at Cratos Capital in Johannesburg.
MTN crises

MultiChoice’s predicament resembles that which engulfed MTN Group Ltd in 2015, when Africa’s largest mobile provider was fined $ 5 billion for failing to unsubscribe Nigerian subscribers without proper registration. . While the transporter ultimately settled for a much lower penalty, the stock did not fully recover.

MTN then had disputes over taxes and dividends withdrawn from Nigeria, its largest and most populous market. Shoprite Holdings Ltd, Africa’s largest food retailer, sold its operations in the country to local investors this year after battling supply chain disruptions and repatriation issues.

Nigeria’s tax administration asked lenders to freeze MultiChoice’s local bank accounts to collect suspected tax arrears last month. The move came after the Johannesburg-based company refused to grant access to its servers for an audit, Nigeria’s Federal Inland Revenue Service said at the time.

The $ 2.2 billion bill facing MultiChoice is a deposit and condition for the pay-TV company’s case to be heard on a date adjourned on September 23, the Federal Inland Revenue Service said on Wednesday in a press release sent by email.


Read: Multichoice Reports Sharp Increase in Profits – Despite Losing Premium Subscribers


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