Fears Of Another Hike As MultiChoice Reaches N35b Tax Settlement With FIRS

There were fears of another increase on DSTV and GOTV subscription rates after the company running the franchises in Nigeria, MultiChoice, reached an agreement with the Federal Inland Revenue Service, FIRS on the settlement of outstanding tax issues.

GWG.ng reports that the settlement between the FIRS and Multichoice is estimated at $37.3 million (35.4 billion naira).

This development follows a period of contention between the media organization and the Federal Inland Revenue Service (FIRS) of Nigeria, which had previously frozen the company’s accounts in 2022. The FIRS had issued a substantial tax claim against MultiChoice’s operations in Nigeria, amounting to N1.8 trillion ($1.27 billion), along with an additional $342 million for value-added taxes.

Under the terms of the settlement, the agreed-upon amount will be offset by the security deposits and good faith payments that MultiChoice Nigeria and MultiChoice Africa Holdings have already made to date.

As a major player in the African entertainment landscape, MultiChoice offers a diverse range of products and services, including Showmax, M-Net, SuperSport, Irdeto, and KingMakers. Its reach extends to over 23.5 million households across 50 markets in sub-Saharan Africa.

Having commenced operations in Nigeria in 1993 through a joint venture between MultiChoice Africa and Adewunmi Ogunsanya (SAN), the media organization has been instrumental in providing content in indigenous Nigerian languages such as Igbo, Yoruba, and Hausa.

The economic significance of MultiChoice Nigeria’s settlement with FIRS on the tax liabilities cannot be overstated.

According to a 2019 Socio-Economic Impact Report from Accenture, the company has made substantial contributions to Nigeria’s GDP, amounting to N363 billion directly from 2016 to 2019. Furthermore, the media organization has played a pivotal role in fostering economic growth through the establishment of new businesses, substantial tax payments, and significant investments in content creation and local production facilities.

However, the report, GWG.ng reports that Multichoice has been seen by many Nigerians as a burdensome monopoly with its repeated hikes on subscription rates and hence the fear that the tax settlement with the FIRS could lead to another hike in tariffs as the South African based company aims to pass on the tax liability to subscribers.

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