The implementation of VAT rate from 5% to 7.5% by MultiChoice, operators of DStv next month has been described by some Nigerians as ill-timed when the implications of Covid-19 have upended businesses and individuals’ planning.
The pay TV company has recently announced that the company will adjust its DStv and GOtv prices from June 1, 2020 to accommodate the implementation of the new VAT rate of 7.5% from 5%.
“While this business decision by MultiChoice is normal in a country that has increased its VAT rate, it is coming at a wrong time when individuals and businesses are struggling with pressures from implications of Covid-19”, says Henry Omafodezi, CEO of 7Gong, a PR firm based in Lagos.
He said from a PR perspective, the decision is coming at a wrong time in the period of Covid-19.
Another subscriber who does not want her name mentioned said the DStv VAT increase this time of Covid-19 will put more pressures on subscribers who are managing to sustain themselves.
John Ajayi, a marketing communication practitioner argues that DStv, as a consumer centric company should have waited on the implementation of the VAT to allow the economic pressures from Covid-19 to ease.
He suggested that since the company has delayed the implementation since February, it could have waited a little bit and capitalise on the gesture to re-enforce its bond with subscribers.
“Further delay in the implementation of the VAT on its services would indicate that the pay TV company is sympathising with Nigerians especially this time Covid-19 is ravaging the world”.
In his reaction, Akonte Ekine, CEO of Absolute PR said MultiChoice is doing the normal thing by adjusting to the VAT increase. He said if subscribers upset about the company’s decision especially this time, they should ask government to return to 5% VAT.
The implementation of VAT has increased the payment of premium subscribers on DStv to N16,200 against N15,800. This is addition of N400. Compact Plus subscribers will pay N10,925 against N10,650. Similarly, Compact bouquet price has been adjusted from N6,800 to N6,975. Subscribers on Confam bouquet will now pay N4,615 against N4,500 while Yanga subscribers will pay N2,565 against N2,500.
Subscribers on Max on GOtv will pay N3,280 from N3,200 while Jolli and Jinja subscribers will pay N2,460 and N16,640 respectively.
MultiChoice explained that the increase in fees was in line with the legislation of the Federal Government which increased VAT in January 2020, with implementation effective 1 February 2020.
“In order to provide some relief for customers, MultiChoice Nigeria has absorbed the cost of increase in VAT for the past four months, keeping its products and services at the old 5% VAT, however this is no longer possible and the mandated 7.5% VAT will be applied accordingly”.
The firm said it acknowledges that Nigerians are living under increased economic pressure and want to make every Naira they spend count. “We remain committed to providing our customers with value for their Naira while giving them access to the best available content”.
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