Breaking: MultiChoice defeats FG in Court
The Nigeria Broadcasting Commission had earlier directed MultiChoice, the parent company of DSTV and GOTV to pay a percentage of their gross annual income to the commission.
However, MultiChoice was displeased and sued the Nigeria Broadcasting Commission in court.
MultiChoice defeats the NBC after court intervention.
The Federal High Court in Abuja on Wednesday struck out Section 2 (10) (b) of the National Broadcasting Code, 6th Edition, which required broadcasters like MultiChoice to pay 2.5% of their “Gross Annual Income” to the commission as an annual operation levy.
This judgment comes as a result of a suit filed by MultiChoice Nigeria Ltd against the National Broadcasting Commission (NBC).
The judge, Justice James Omotosho, ordered that the provision be struck out and replaced with ‘Net Annual Income’ instead of the existing ‘Gross Annual Income.’
The court also stopped NBC from requesting MultiChoice’s VAT remittance, FIRS reports, bank statements, trial balances, and general ledgers.
The court only allowed the Nigeria Broadcasting Commission to demand the annual audited accounts of the companies as stipulated in the NBC Code.
The judge stated that the Nigeria Broadcasting Commission can only access the financial documents of MultiChoice through the Federal Inland Revenue Service (FIRS).
So to access MultiChoice financial documents, NBC will have to request such documents from the Federal Inland Revenue Service (FIRS).
The judge partly said, “In the United States, for instance, companies pay a flat rate of 21% on their profits, determined after all expenses have been deducted. Similarly, in the United Kingdom, a 25% corporation tax is imposed on company profits.”
“From this Court’s knowledge of economics, gross income implies all money that accrues to a person or business within a specific time.
This gross income typically does not account for company expenditures such as production costs, rent, vendor payments, staff salaries, taxes, and other costs. It is only after all these payments are made that the company determines its profit, known as net income.
“Consequently, this Court holds that Section 2 (10) (b) of the National Broadcasting Code, 6th Edition, which demands 2.5% of Gross Annual Income from broadcasters as an Annual Operating Levy, is unconscionable, unfair, and stifling to the plaintiffs,” Justice Omotosho ruled
