Companies
Multichoice Kenya taxes up to Sh3.1bn
Tuesday July 18 2023
MultiChoice’s DSTV mobile transmission vehicle. FILE PHOTO | NMG
Pay television service provider Multichoice Kenya’s tax bill rose 33 percent to ZAR 0.4 billion (Sh3.14 billion) in the financial year ended March 2023, pointing to the growing direct and indirect deductions.
Disclosures by the Multichoice Group, which owns the Kenyan unit through Multichoice Africa Holdings, show that the taxes jumped from ZAR 0.3 billion (Sh2.35 billion) paid in the previous financial year.
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The tax is split equally among the key tax heads—corporate tax, value-added tax (VAT), withholding tax and pay-as-you-earn (PAYE).
The payments from Kenya ranked the fourth highest among Multichoice Group firms.
The South African business maintained the lead with ZAR 5.6 billion (Sh43.94 billion) followed by the Netherlands (Sh19.6 billion) and Nigeria (Sh18.8 billion).
“The total tax contribution amount reflects all material cash taxes paid and collected by the group. The tax paid amount is the actual cash tax incurred and paid by the group and includes corporate income tax, property taxes, social security contributions, etc,” said the firm.
Multichoice has been facing increased competition in Kenya from StarTimes and Zuku as well as online streaming services like Netflix and Amazon Prime, even as dynamics such as currency depreciation force it to increase prices.
“Rising inflation and unemployment across our markets, coupled with specific events like the destructive flooding across west and central Africa, specifically in Nigeria, is hindering our customers’ ability to afford their preferred DStv and GOtv subscriptions,” says the firm.
The firm announced recently that it will from August 1 increase its pay-TV charges in Kenya by up to Sh400 from in response to currency depreciation and rising costs of doing business, making it the second adjustment this year.
The higher charges for its various bouquets will see adjustments between Sh50 and Sh400 for DStv customers, translating to between four and six percent. MultiChoice said the prices are inclusive of VAT.
Some GOtv bouquets for Lite, Value and Plus have remained unaffected, while Max and Supa increased by Sh100 and Sh150, respectively.
The increase comes after another in April, raising the charges by between six and 10 percent due to rising operational costs.
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Multichoice Group’s price increases have helped take average revenue per user (ARPU) to ZAR 126 (Sh989) from ZAR 110 (Sh864) in the previous financial year.
“We were able to offset some of these currency pressures through inflation-based price increases across the majority of our markets which uplifted our organic ARPUs,” says Multichoice.
