TV Cabo Mozambique Fined For Tax Evasion
In 2002, the cable TV and communications company that is 50 percent stated owned by Mozambican Telecommunications (TDM), said in its reports that it had already paid over $183mil to foreign companies in Portugal for technical help and insisted that the company could not be subject to tax based on the existing double taxation agreements between the two countries.
However, the Mozambican tax officials disagreed and, TV Cabo Mozambique was ordered to pay $18mil as an Industrial Contribution – levy in discharge through the Maputo Special Branch. Apparently, this was the amount that was outstanding for the payment of royalties to entities based in Portugal.
@Verdade found that TV Cabo Mozambique disagreed with the Mozambican tax authorities’ allegations and had lodged an appeal against the fine.
However, the Judge of the 1st Instance of Contentious Contributions and Taxes of the Maputo Finance Office denied the appeal, because he ruled that under the Mozambique-Portugal double taxation clause, TV Cabo Mozambique should have paid $19mil for failing to initially deduct the royalties paid to entities that are based in Portugal.
The judge added that the pay-TV operator should have also paid a fine that was equal to the tax.
TV Cabo Mozambique was still not happy with this outcome so then appealed to the Administrative Court (TA) in 2011. Unfortunately, the cable business lost the second appeal as well when the new judge confirmed that the first judge had not made an error in his judgement.
Credit: This article orignated from www.balancingact-africa.com