A Nigerian tax tribunal ordered the local unit of South Africa's pay-TV company MultiChoice to pay 50% of a disputed 1.8-trillion naira ($4.38-billion) tax bill relating to previous years, the Federal Inland Revenue Service (FIRS) said on Wednesday.
The deposit of 50% of the sum was a condition that had to be fulfilled by MultiChoice Nigeria before the tribunal could hear a full appeal on the matter, the FIRS statement said.
MultiChoice Nigeria, a division of a South African group, provides DSTV, a cable TV product that is popular in Nigeria.
The statement came after the FIRS said in July it had instructed banks to freeze the accounts of MultiChoice because the company had refused to grant tax auditors access to its servers.
FIRS Chairman Muhammad Nami said at the time that banks would have to recover the 1.8-trillion naira that the tax service said it was owed.
MultiChoice Nigeria said the tribunal did not compel it to make payment and that it was engaging the FIRS in attempt to resolve the matter.
It said local law requires a deposit with the FIRS of an amount equal to the previous year's tax paid or half the disputed tax bill under appeal, whichever is lesser. The pay-TV company said its previous tax paid is less than the disputed amount.
The tax tribunal adjourned the case until Sept. 23, subject to the company complying with its order, FIRS said in its statement.
MultiChoice is the latest South African group with a significant presence in Nigeria to face a multibillion-dollar tax demand from the West African country.
In January 2020, Nigeria's attorney general withdrew a $2-billion tax bill it had sought to impose on the mobile telecoms group MTN, after a long saga that investors said had damaged Nigeria's reputation as an investment destination.