The new VAT regime, which came into effect on February 1, raised the rate of VAT from five per cent to 7.5 per cent on goods and services.
Since coming into effect four months ago, MultiChoice has absorbed the 2.5 per cent hike on behalf of its subscribers, an action that has kept that VAT rate at the pre-February rate of five per cent.
Sources told Vanguard that there is no way the pay television giants can continue to pay the difference between the old and the new rates for much longer, as this has impacted very negatively on its finances.
The source said: “Pay television service is not exempted from VAT and I want to believe that MultiChoice is the only company still charging the old VAT rate on its products and services. It is important to note that VAT is not part of the turnover of companies, which they, in fact, collect on behalf of the Federal Government and remit same on a particular date.”
Since coming into effect four months ago, MultiChoice has absorbed the 2.5 per cent hike on behalf of its subscribers, an action that has kept that VAT rate at the pre-February rate of five per cent.
Sources told Vanguard that there is no way the pay television giants can continue to pay the difference between the old and the new rates for much longer, as this has impacted very negatively on its finances.
The source said: “Pay television service is not exempted from VAT and I want to believe that MultiChoice is the only company still charging the old VAT rate on its products and services. It is important to note that VAT is not part of the turnover of companies, which they, in fact, collect on behalf of the Federal Government and remit same on a particular date.”