Uganda's new pay-TV entrant reveals high taxes can stifle penetration and fail country to meet digital migration deadline
Key players in the broadcasting industry revealed that the entry of Azam TV, a subsidiary of Bakhresa group of companies based in Tanzania, is expected to tighten the competition in the pay-TV sector which now has around six competitors including GOtv, Zuku and StarTimes.
The pay-TV which was launched recently, however, decried the high taxes and expensive local content which is affecting the industry.
According to the company's general manager, Simon Arineitwe, high taxes have stifled penetration and could pose a threat in meeting the June 2015 digital migration.
Arineitwe revealed the industry pays 49 per cent of revenue in taxes, which include 25 per cent import duty on dishes, six per cent withholding tax and 18 per cent VAT. The pay TV sector also pays a 0.5 per cent Uganda National Bureau of Standards (UNBS) levy, which they consider a deterrent for more people to subscribe to pay-TV services since the taxes are passed on to the final consumer.
"Pay-TV products need to be as cheap as possible because they serve as cardinal stepping stones for Uganda to migrate from analogue to digital broadcasting. More tax waivers or cuts will enable more people who own television sets to get on board and not be left out as the country transits to digital broadcasting," noted Arineitwe.