Nigeria’s tax authority (Federal Inland Revenue Service) has agreed to an out-of-court settlement with South Africa’s MultiChoice Group Ltd., Africa’s biggest pay-TV provider, over a $4.4 billion tax dispute.
Multichoice will withdraw all pending litigations and Nigeria’s tax authority will conduct a forensic audit of MultiChoice’s accounts to determine the company’s tax liability, according to a statement by the Federal Inland Revenue Service. However, it didn’t provide details of the settlement.
South Africa’s MultiChoice went to court last year to challenge the penalty imposed by the tax authority, (Federal Inland Revenue Service) which said the owner of the DSTV service evaded taxes and denied auditors’ access to its servers.
The dispute was the latest between South African firms operating in Nigeria, though previously the primary target has been the mobile telecommunications MTN Group Ltd.
Johannesburg-based MTN paid over $1 billion fine and agreed to list its Nigerian operation in Lagos following a dispute over cancelling subscriptions of people without proper registrations in 2016, though it fended off fines over tax and the repatriation of funds in later years.
MultiChoice’s shares have shot up over the eight months since the initial tax claim, gaining 9.2% over the period. The shares rose 2.1% by the close in Johannesburg on Wednesday, valuing the company at R54 billion ($3.6 billion).