Thu 01 Oct 2015, 08:13
The company paid tax amounting to Sh2.3 billion in taxes in 2014 - a contribution that has almost doubled since 2011.
MultiChoice marked 20 years of its operation in Kenya on Tuesday 29 September with an independent report released by Deloitte documenting its significant impact in the country’s economy.
Deloitte revealed that MultiChoice Kenya is the single largest contributor for the growth experienced in the country’s entertainment sector accounting for over 40% of the money paid to production houses. The company also pays 50 to 100% more per episode than local televisions for commissioned shows and films.
“MultiChoice activities in Kenya contributed Sh16billion to Kenyan GDP in 2014 with a direct injection of Sh3.2billion to GDP,” Deloitte said in a report documenting ‘MultiChoice’s Economic Impact in Kenya.’
The company’s economic impact was evaluated through its records on procurement of goods and services in its supply chain and associated ripple effects through the economy. Deloitte also measured MultiChoice Kenya’s direct contribution to Kenyan GDP through the sum of its profits, wages and taxes paid in Kenya.
“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,” said Deloitte.
About 70% of the company’s direct contribution to economy consists of tax payment while 23% is on wages, 6% dividend pay out to Kenya Broadcasting Corporation and 1% was spent on its Corporate Social Responsibility activities.
MultiChoice employed 630 full time staff and contractors by the end of year 2013 and indirectly supports the jobs over 1 000 people in Kenya.
According to Deloitte, MultiChoice has had numerous spillover effects which are by-products of its activity, experienced by other companies in the same sector or by the Kenyan economy.
“MultiChoice spillover effects include its role in the support of the digital switchover, promoting local culture, informing and educating, supporting the local production sector and facilitating sports,” Deloitte explained.
In 2012, MultiChoice Kenya invested about Sh1.2billion in establishing a local production studio which houses about six local content producers and which has state-of-the-art facilities that enables continued growth of the production ecosystem. These studios have become a production venue for a variety of local shows including Vitimbi, Kona, and Coca-Cola’s Coke Studio Africa among others.
“We thank our customers for their support in the last twenty years. It is as a result of their loyalty that we have managed to grow incredibly in innovation and reach and we promise to keep this up,” said Stephen Isaboke, Regional Director, MultiChoice East Africa.
“Our move to construct a Sh1billion MultiChoice East Africa hub in Nairobi not only demonstrates our long-term commitment to the Kenyan market but also our innovative and customer focused plans for growth,” said Isaboke.
Whilst MultiChoice initially provided an analogue only service in partnership with Kenya Broadcasting Corporation, this service was transformed into a digital service as early as 1996.
Over the years, the company has expanded its offering across various platforms such as satellite, Digital Terrestrial Television (DTT) and mobile to cater to the diverse needs of Kenyan households.
MultiChoice paid about Sh1.4 billion to KBC in dividends between 2006 and 2014.
Apart from its big role in the entertainment sector, the company has been famed for its role in catapulting Kenyan sports to greatness. Between year 2011 and 2014, MultiChoice via its SuperSport and GOtv brands paid over Sh2.6billion in broadcast licence fees, productions costs and sponsorship fees.