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Pay TV: Nigerians kick as Multichoice adjusts to 2.5% VAT increase

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Multichoice, VAT

Following the announcement by Multichoice, Nigeria’s major Pay TV, to increase its subscription rate to reflect the 2.5% VAT increase by the Nigerian government, many Nigerians have taken to the social media to bewail the move.

According to some of the tweets, the planned VAT reflection in DStv subscription billed to take effect from June 1st, 2020 is rather coming at a time Nigerians are faced with unpalatable economic conditions resulting from the lockdown measures adopted by the country to combat the pandemic, coronavirus.

The effect of the lockdown has made Nigerians witness an increase in the prices of commodities like foodstuffs and other commodities even as the new law recently announced by the Lagos State government to curb the spread of the pandemic have also taken a negative effect in the price of transportation fares.

Also, while the cost of living for masses is on the rise, many Nigerians who live below 1 dollar per day struggle to provide 1 square meal per day for their families.

And while the challenges to access the basic necessity of life continues, the plan to reflect the VAT increase by MultiChoice is coming without welcome by the critics.

According to some of the critics, “the move is an unwelcome act on Nigerians working in the formal and the informal sectors.”

“The vast majority of the people outside the formal system are the major target of the lockdown and it has hit them devastatingly. And any disruption to their daily livelihood has a huge and significant impact on their ability to meet the most basic needs,” said Felix Morka, executive director of the Social Economic Rights Action Centre, a Lagos-based non-governmental organization.

Some of the DStv and GOtv users who took to the social media to demand the suspension of the move noted that “DStv site shows that on the 1st of May 2020, the new price for GOtv decoder increased from 8,100N to 9,100N, while the DStv decoder witness an increase by 40% from 12,500N to 17,500N.”

“MultiChoice said it will increase the prices of its bouquet packages by 7.5% effective from June 1st.”

READ ALSO: Why Multichoice empowers GOtv users to manage accounts independently

A subscriber with the twitter handle @fisayosoyombo added that “It’s HIGHLY insensitive of @DStvng to announce a pay hike (starting June 1) in the middle of a pandemic that has left many of us broke. While lots of companies have been financially battered for the past six weeks, @DStv is one of the few that have gained from the increase…”

Another user wrote, “While it is obvious that EPL is one of the strongest reasons why many subscribers choose DStv and GOtv instead of the other Pay TV platforms, the long absence of EPL and the recent price increase have made some subscribers reconsider their choice, especially at this period when Nigerians are facing untold hardship due to lockdown.”

Reacting to this, MultiChoice chief executive officer, John Ugbe denied the claim saying, “ We did not increase subscription rate. The price review announced to customers is an adjustment to reflect the 2.5% increase in VAT which was initiated by the federal government in January.

“What has happened is that the federal government’s finance act was signed in January and implementation began in February so, the 50% increase in VAT is what we are implementing now,” he noted.

Speaking on the delayed implementation of the VAT increase when other companies adjusted rates immediately, Ugbe noted that, “We thought we could absorb the cost for a while and that was what we did.

Ugbe furthered explained that “We’ve absorbed the cost since February and we have been paying the difference in taxes and we can no longer do so. Once again, we are not hiking prices, it’s only the 2.5% increase in VAT that we are implementing.”

However, the critics noted that “MultiChoice’s major competitor in the Pay TV industry did not increase the prices of its decoder and subscription rate since January. And if we use VAT as an excuse to explain the increase in the subscription rates, it doesn’t explain why decoder prices should skyrocket when everyone’s life is badly affected by the pandemic.”

However, while Nigerians are facing the battle to forestall the price increase by MultiChoice, Similar case is ongoing in South Africa.

MultiChoice on April 1st, 2020 announced a price increase in its bouquet in South Africa and this announcement did not go down well on subscribers who found out that in other countries, DStv was advertising up to 75% discount.

Also In Uganda, subscribers complained to the appropriate authorities demanding for a price slash because of the frequent “repeats” of programmes on its channels.

VANGUARD

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