MultiChoice initially announced its agreement on a settlement with the Nigerian Federal Inland Revenue Service in March 2022.
MultiChoice has reached a tax settlement with the Nigerian tax authority, effectively ending a two-year-long tax dispute that initially impacted its share price.
Under the agreement, MultiChoice will pay $37.3m to settle all matters in dispute, significantly less than the $4.4bn initially demanded by the Nigerian tax receiver from MultiChoice Nigeria.
The tax disagreement stemmed from Nigeria’s federal inland revenue service imposing a substantial tax bill in 2021, alleging that MultiChoice had evaded taxes and obstructed auditors’ access to its servers. The hefty tax bill initially exceeded MultiChoice’s market value, causing a drop in its share price. However, the share price rebounded after MultiChoice successfully challenged the ruling.
As of February 8, MultiChoice’s shares were up 1.11% to R96.05, valuing the company at R42.5bn. The group’s stock has surged 26% in the past week, driven by a buyout offer of R105 per share by French broadcast group, Canal+. Despite this, earlier in the week, MultiChoice rejected the offer, deeming it too low.
MultiChoice first announced that it had agreed a settlement with FIRS in March 2022. It followed the Nigerian tax authorities freezing MultiChoice’s bank accounts in July 2021 after it alleged it had not paid since its launch in the country.