Sunday, September 26, 2021

    Andersen faults FIRS, says Nigeria contributes 10.19% to MultiChoice’s revenue

    Must read

    Naija247news Editorial Team
    Naija247news is an investigative news platform that tracks news on Nigerian Economy, Business, Politics, Financial and Africa and Global Economy.

    Andersen has said that Nigeria contributes 10.19 per cent to MultiChoice’s revenue base and not the 34 per cent that the Federal Inland Revenue Service claimed.

    The tax and business advisory firm made this known in an article questioning how the FIRS arrived at its N1.8tn tax bill of MultiChoice Nigeria.

    In the article titled ‘Reputational Risks and Tax: MultiChoice as Case Study’, Andersen said that the FIRS may have adopted a faulty computational premise.

    The firm added that the FIRS had also given an impression that it was prejudiced towards foreign companies operating in Nigeria.

    Andersen quoting the MultiChoice Group’s audited financial statements for 2019 said Nigeria accounted for 34 per cent of the group’s Rest of Africa, with the RoA accounting for 29.6 per cent of the group’s revenues.

    The firm said, “Thus, the effective total revenue of Nigeria to the group is 10.19 per cent. It is arguable that 10.19 per cent is significantly different from 34 per cent of total revenue. “However, one cannot help but question whether some other parameters in the computation of the alleged tax liability are also misleading.”

    Andersen described as misleading the FIRS’ claim that Nigeria accounted for 34 per cent of the total revenue of the MultiChoice Group ahead of Kenya with 11 per cent and Zambia in third place with 10 per cent as the basis for arriving at N1.8tn and $342m liability.

    The firm added, “The FIRS Chairman observed that the issue with tax collection in Nigeria, especially from foreign-based companies conducting businesses in Nigeria and making massive profits is frustrating and infuriating.

    “Consequently, a routine tax audit of a foreign-based company that is profitable in Nigeria may trigger apprehension, given the perception that they are seen as worse offenders ab initio.

    “As a matter of fact, the posture from the FIRS towards foreign-based companies may lead some to adopt the approach of being aggressive with tax planning, so that they can eventually concede to liabilities, which they believe the tax authorities will insist on establishing.”

    Andersen is following in the steps of PricewaterCoopers who recently faulted the ruling of the Tax Appeal Tribunal on the dispute between MultiChoice and the FIRS, and its interpretation by the FIRS.

    - Advertisement -spot_img

    More articles

    - Advertisement -spot_img

    Latest article

    WP to LinkedIn Auto Publish Powered By :