A Nigerian tax tribunal has ordered the local unit of South Africa’s pay-television company MultiChoice Group to pay 50% of a disputed ₦1.8-trillion (R65.5-billion) tax bill — or R32.8-billion — 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.

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 access for the tax auditors to its servers.

FIRS chairman Muhammad Nami said at the time that banks would have to recover the ₦1.8-trillion which the tax service said it was owed.

The tax tribunal adjourned the case until 23 September, subject to the company complying with its order, FIRS said in its statement.

Latest company

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 US$2-billion tax bill it had sought to impose on the mobile telecommunications group MTN, after a long saga that investors said had damaged Nigeria’s reputation as an investment destination.

The R65.5-billion claim against MultiChoice Nigeria is significantly greater than parent MultiChoice Group’s market capitalisation. MultiChoice shares tumbled in Johannesburg on the news and were last trading down more than 7% at R105.95/share.