Multichoice’s alleged tax evasion and exploitative pay TV services in Nigeria

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In what appeared to be one of the big discoveries of fraud in recent time, news emanated from the House of Representatives alleging that Nigeria’s biggest Cable TV service provider, MultiChoice Group, the operator of DSTV and GOTV, was accused of non-remittance of a whopping sum of ₦1.8 trillion tax revenue to the coffers of the Nigerian government.

We understand that, this explosive is a caveat emptor (“let the buyer beware”) on the report that owners of Multichoice want to sell it off to a foreign company. Aside DSTV and TSTV, other Cable TV service providers include StarTimes, MyTV, TSTV, Daarsat, CONSAT, HiTV, etc. Many consumers enjoy free and flexible services of these service providers; however, DSTV and GOTV are most unfriendly and notorious in exploitative price system against the over 2 million subscribers in Nigeria.

During plenary last Wednesday, Honourable Saidu Abdullahi (APC-Niger), who moved the motion on the adoption of resolution to probe the matter was quoted by media reports as saying that, in 2021, the Nigerian government, through the Federal Inland Revenue Service (FIRS), engaged a consultant under a Whistleblowing contract which audited the tax obligations of MultiChoice Nigeria. There were legal actions by the tax agency to recover the tax unsuccessfully.

In his word, the law maker said, “The systems audit and investigation revealed enormous indebtedness to the tune of over ₦1.8 trillion in back total taxes for MultiChoice Nigeria. This also includes a $342 million in Value-added tax, for MultiChoice Africa which had never paid any taxes since they started business operations in Nigeria.”
Note that, the Nigerian government has continued to suffer revenue leakages as a result of fraudulent activities and tax evasion by multinational corporations in Nigeria over the years, but nothing has been done to bring them to book. One of such companies is MultiChoice.

It is interesting too to note that this is not the first time that members of the National Assembly (NASS) are raising hell against multinational companies that defraud Nigeria. Our law makers should be reminded that Nigerians do not trust them to do any patriotic job of protecting their interest on such matters. No.

In 2018, 2020, 2022 up to last year, the House of Representatives pretended to Nigerians that it would ensure that all Cable TV service providers in Nigeria implemented pay-per-view and pay-as-you-go model and other price reduction strategies, but all to no avail. In fact, in 2018, MultiChoice was taken to the court in order to stop it from subscription price increase. As expected, John Ugbe, Chief Executive Officer of MultiChoice Nigeria, defended the exploitative policy.

News report quoted him as saying that, “It is only in instances where there is two-way communication between the device at the subscriber’s home and the headend of the pay-tv service provider, which will enable the provider to determine when a subscriber is connected or not, that a billing system could be designed to take into cognizance the subscriber’s behavior”.

He also added that, “The economies of scale model employed by broadcasters mean that subscribers pay less. We are yet to see a pay-TV business anywhere in the world that does PAYG in the sense intended here. We do not believe the model is technically or commercially feasible.”

Big lie! Since, we now know that the market experience of TSTV’s PAYG and PPV has drowned Mr. Ugbe’s cacophony for good.

With increasing poverty, economic hardship, unstable or lack of electricity supply, consumers’ rights and interest in Nigeria are never protected; rather, they are subjected to serial exploitation by unscrupulous service providers.

Does NASS have legislative integrity to protect their interest? Hardly. Do we not have regulatory agencies in Nigeria? Where is the National Broadcasting Corporation (NBC)? Where is the Federal Competition and Consumer Protection Commission (FCCPC)? Why does the Nigerian government enjoy watching her citizens being exploited, oppressed, dehumanized and throttled yet does nothing?

Our stand is that, Cable TV services and the price system in Nigeria should be deregulated. The federal law makers should stop deceiving Nigerians; they should be serious for once by standing up to these beastly exploiters. The often weak, corrupt and compromised regulatory agencies should wake up from slumber in defence of consumers’ interest. Let the investigation of MultiChoice be thorough and transparent and the outcome made public.