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  • Business - Companies
  • Updated: May 09, 2020

DSTV Price Hike: Multichoice Boss Reacts To Criticism, Explains Reason For Price Increase

DSTV Price Hike: Multichoice Boss Reacts To Criticism, Expla

 

The Chief Executive Officer of Multichoice, John Ugbe, has reacted to criticism from Nigerians after a hike in DSTV's package prices led to accusations that the South African cable television company was extorting its subscribers in Nigeria, one of its biggest market in Africa.

Allnews had reported that DSTV sent messages to its subscribers, informing the customers of an increase in its package prices as well as its Add-ons. The increase was caused by the addition of VAT (Value Added Tax). DSTV stated in its message that 7.5% VAT will now be added to its prices.

The addition of VAT was in line with the economic policy of President Muhammadu Buhari, which increased VAT to 7.5% from 5%, in order to increase revenue generation. While other companies began to include the VAT in their prices in February, DSTV, a subsidiary of Multichoice, had delayed the inclusion.

The addition of VAT by DSTV had occurred just a month after the Minister of State for Labour and Employment, Festus Keyamo, urged DSTV and other cable tv companies to offer their subscribers free one-month subscription. The plea was ignored by the cable tv firms.

While explaining the reason for the delay, Ugbe said DSTV had been paying the increased VAT without charging their subscribers for it, but the company can no longer afford the payment under the current economic circumstances.

He stated that it wasn't a tariff review or increase, rather, the addition of VAT as required of the company, “We are not increasing prices. 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.”

“We thought we could absorb the cost for a while and that was what we did. We’ve absorbed the cost since February and we have been paying the difference in taxes and we can no longer do so. So once again, we are not hiking prices, it’s only the 2.5% increase in VAT that we are implementing.” The MultiChoice boss told The Cable

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