MultiChoice in trouble as FG moves to freeze bank accounts
The federal government has taken a decision to freeze MultiChoice bank accounts due to a N1.8 trillion tax debt.
The Federal Inland Revenue Service (FIRS) claimed it has hired banks to act as agents in freezing and recovering N1.8 trillion from MultiChoice Nigeria Limited (MCN) and MultiChoice Africa Limited (MCA) accounts (MCA).
Abdullahi Ahmad, Director, FIRS Communications and Liaison Department, said this in a statement on Thursday.
The agency said the enterprises consistently violated all agreements and obligations.
“The corporations would not swiftly react to correspondences,” FIRS chairman Muhammad Nami was quoted as saying in the release. They lacked data integrity and were opaque, denying FIRS access to their information on a regular basis.
“MCN, in particular, has evaded providing accurate information to the FIRS on the number of its users and revenue. The companies are involved in under-remittance of taxes, necessitating a thorough examination of the company’s tax compliance level.”
According to the FIRS, the groups’ performance did not reflect their tax responsibilities or degree of compliance in the country.
The FIRS further stated that Multi-Choice Africa (MCA), the parent business of MCN, had been non-compliant since its establishment, and that the parent company, which provided services to MCN, had not paid Value Added Tax (VAT) since its creation.
“The FIRS is frustrated and infuriated by the issue of tax collection in Nigeria, particularly by foreign-based companies conducting businesses in Nigeria and reaping large profits,” it stated.
“Unfortunately, companies come to Nigeria solely to violate our tax laws by engaging in tax avoidance. There’s no denying that the broadcasting, telecommunications, and cable-satellite businesses have transformed Nigerian communication. However, some businesses are found deficient when it comes to tax compliance. They do things in Nigeria that they wouldn’t dare to try in their home countries.”
Other African countries where they have a presence, he claimed, account for 45 percent of the group’s overall revenue.
“Information now available to FIRS has revealed a tax liability of $1.8 trillion and $342.5 million for relevant assessment years. 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,” Mr Nami explained.
“Affected banks are obligated to sweep balances in each of the above-mentioned firms’ accounts and pay the same in full or part settlement of the companies’ respective tax arrears until full recovery,” he continued.
“Any transaction involving the corporations or any of their subsidiaries should go through this process first. It is also recommended that any transactions, particularly transfers of funds to any of their subsidiaries, be reported to the FIRS prior to execution on the account.
”It is critical that Nigeria end all tax frauds that have been going on for far too long, and that all corporations be held accountable and made to pay their full share of appropriate taxes, including back duty taxes owed, particularly VAT.”
CBN warns banks over foreign exchange malpractices
The Central Bank of Nigeria, CBN, has insisted that the FX operating license of any bank or banks that are found guilty of ongoing investigations in foreign exchange malpractices would be suspended for at least a year.
The circular signed today by the Director Trade and Exchange Department, CBN, Ozoemena Nnaji stated: “In line with the continuing close surveillance of our financial markets in general and the FX market in particular, the CBN wishes to remind all banks that it is their responsibility to not only Know their Customers (KYC requirements) but also Know their customers’ business (KYCB requirements).
“Given these responsibilities and in view of recent occurrences in the market, the CBN would like to remind banks to desist from all and any forms of FX malpractices.
“We wish to reiterate that the FX operating license of any bank or banks that are found culpable with ongoing investigations would be suspended for at least one year. Please note and ensure compliance.”
Naira hits historic low of 543 against dollar
The naira has continued to depreciate on the parallel market, selling for N543 to the dollar on Thursday.
The bureau de change operators in Abuja bought dollar at N540, then it was sold for N543.
The British Pound was also sold for £1/N740.
This comes 44 days after the Central Bank of Nigeria barred sale of Forex to all bureau de change operators across the country.
On June 27, 2021, the CBN ended the sales of Forex to BDCs saying the parallel market had become a conduit for illicit Forex flows and graft.
The CBN said it would also no longer process applications for BDC licences in the country.