MultiChoice says it pumped Sh15bn into economy last year

Corporate News

From left: MultiChoice East Africa regional director Stephen Isaboke, CA director-general Francis Wangusi and KBC managing director and MultiChoice Kenya chairman Waithaka Waihenya during the release of the study on Sep 29, 2015. PHOTO | FILE 

By OKUTTAH MARK, mokuttah@ke.nationmedia.com

In Summary

• MultiChoice says it pumped Sh15bn into the Kenyan economy through taxes, jobs and procurement of goods and services locally.

MultiChoice — the owners of pay television company DStv, has claimed that it contributed an estimated Sh15.1 billion to Kenya’s GDP last year through direct and indirect payment of taxes, employment and procurement of goods and services locally.

While releasing a study done by Deloitte on Tuesday, the South African firm which recently faced a customer backlash for raising monthly subscription, said it made a Sh3 billion direct contribution to the economy last year consisting of tax payments, wages, a dividend payout to the Kenya Broadcasting Corporation and corporate social responsibility activities.

The company estimates that Sh6.6 billion contribution to the economy came from its supply chain, while Sh5.4 billion was additional multiplier effects arising from its local operations.

The report, released for the first time in the company’s two-decade presence in the country, gives the public a glimpse into its operations, revealing details like the number of its employees, expenditure on wages and various corporate taxes. 

“This direct impact is largely due to the tax revenue that MultiChoice Kenya’s activities generate for the Kenyan government.  In 2013 and 2014 the company contributed a total of Sh2.3billion taxes –a contribution that has almost doubled since 2011,” Deloitte said in the report.

The report however does not disclose how many subscribers DStv has in the country. In a February report the Communications Authority of Kenya (CA) put DStv’s customers in Kenya at 600,000 and those of rival StarTimes at 272,594. It also did not capture the competition landscape in the pay television sector.

READ: DStv subscription charges to go up by 15pc from next month

Deloitte added in the report that Value Added Tax (VAT) made up 44 per cent of the company’s tax contribution in 2014.

MultiChoice, which is marking its 20 anniversary in Kenya this year, said the VAT payments were primarily on decoders, transmitters and subscription fees.

MultiChoice Kenya had 630 full time staff and contractors at the end of the year 2013.

It also claimed to be indirectly supporting over 1,000 jobs across the country.  The pay-TV firm paid about Sh1.4 billion to KBC in dividends between 2006 and 2014.

DStv recently increased its monthly subscription fees by between 13 and 15 per cent.

MultiChoice, which bills its customers in dollars, attributed the increase to the depreciating shilling. The report highlighted its role in supporting other economic sectors.

“MultiChoice spillover effects include supporting the local production sector and facilitating sports,” Deloitte said in the report.

In 2012, MultiChoice Kenya invested about Sh1.2 billion in establishing a local production studio that houses about six local TV content producers.