Taxing time for MultiChoice as Nigerian demand sees stocks plummet
An order that the company pay an almost R33bn tax bill saw it lose R3,5bn in market value in just two hours
A dispute between Nigerian tax authorities and MultiChoice, Africa’s biggest pay-TV provider, has intensified, showcasing the risk international firms face as the continent’s largest economy tries to bolster revenue collections.
MultiChoice was ordered by a Nigerian tribunal to pay 50% of a disputed $4.4bn (about R65,6bn) tax bill, prompting a rush to sell shares of the Johannesburg-based company and erasing $240m (about R3,5bn) of market value in less than two hours. The stock gained 3.6% at 9.23am on Thursday after the company said the court directive doesn’t compel it to pay half of the disputed amount.
It may turn into a protracted standoff, if history is an indication. In 2015, SA’s MTN was slapped with a $5bn (now about R74,6bn) fine for failing to deregister subscribers in Africa’s most populous nation without proper registration. While the continent’s largest cellphone provider eventually settled, after months of negotiations, for a far lower penalty, its stock hasn’t fully recovered...