Nigerians have criticised the planned move by MultiChoice Nigeria to increase the cost of its pay TV service DStv to reflect an increase in value-added tax.
According to some, the rise in VAT – from 5% to 7.5% from June 1 – is coming at the wrong time since the Covid-19 lockdown has led to an increase in the price of many commodities as well as transportation.
Felix Morka, executive director of the Social Economic Rights Action Centre in Lagos, said: “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.”
Investigative journalist Fisayo Soyombo took to social media to say: “It’s highly insensitive of DStv 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 has gained from the increased patronage.
“Even those who would not ordinarily renew their DStv subscription did it this time around to keep themselves busy at home during the lockdown. DStv should have shown gratitude by waiting for this pandemic to blow over. This is not how to reward your customers.”
However, John Ugbe, CEO of the Nigerian arm of Naspers-owned African pay TV group MultiChoice, denied the company was hiking subscription rates and said the rise had been forced on 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 increase in VAT is what we are implementing now,” he said.
“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.”