MultiChoice shares fall in South Africa after Nigeria tax evasion allegations

MultiChoice share price dipped by as much as 7.4% at the close of business in Johannesburg, its lowest since March 2020, hours after Nigeria's tax authority accused the company of tax evasion.

The volume traded however exceeded three times the daily average for the past three months, Bloomberg reports.

On Thursday, July 8, 2021, Nigeria's Federal Inland Revenue Service (FIRS) announced that the South Africa owned PayTV company is owing as much as ₦1.8trillion and $342.5million in taxes.

FIRS also ordered commercial banks to freeze the accounts of the company until it pays up.

"When it comes to tax compliance, some companies are found wanting. They do with impunity in Nigeria what they dare not try in their countries of origin," fumed Muhammad Nami, Executive Chairman of FIRS.

Hours later, MultiChoice denied charges of tax evasion as put forward by Nigeria's federal authorities, stating that it complies with the country's tax laws.

“The matter is apparently based on unfounded allegations that MultiChoice Nigeria has not fully disclosed all existing subscribers to authorities.

"MultiChoice Nigeria has not received any notification from FIRS. MultiChoice Nigeria respects and is comfortable that it complies with the tax laws of Nigeria.

“We have been and are currently in discussion with FIRS regarding their concerns and believe that we will be able to resolve the matter amicably," Bamidele Johnson, a representative of MultiChoice, announced in a statement.

It is not the first time Nigerian authorities have tried to penalize a South African company over tax matters.

In 2018, MTN Nigeria, a South African telecommunications company, battled a $2 billion tax evasion claim from the Attorney General's office.

The Central Bank of Nigeria (CBN) also accused MTN of failing to remit $8.1 billion in dividends.