How our activities added value for our stakeholders
Value created for our regulators
The breakdown of our tax contribution per segment is set out below:

48%
ZAR11.8bn
(FY22: ZAR11.3bn)

43%

9%


(1) | The total tax contribution amount reflects all material cash taxes paid and collected by the group. The tax paid amount is the actual cash tax incurred and paid by the group and includes corporate income tax, property taxes, social security contributions, etc. The tax collected amount reflects taxes not incurred by the group, but taxes that were collected by the group on behalf of revenue authorities (e.g. PAYE and VAT). |
Delivering value to governments
Governments rely heavily on revenue from tax contributions made by corporate taxpayers. MultiChoice contributes meaningfully to the government fiscus in our core markets of operation through the collection of indirect taxes on behalf of governments, and through the payment of substantial amounts of tax by way of direct corporate income tax and other taxes. Governments have a broad social mandate to fulfil, which includes social upliftment, access to services and creating and enforcing laws that protect society's various constituencies. We understand the challenges they face and always seek to play our part in supporting the development and sustainability of the countries and industries in which we operate. We comply with all our statutory obligations and seek to build good, honest and open working relationships with tax authorities founded on mutual trust. We have robust tax risk management measures in place (as documented in our group tax policy) and place high regard on our tax and corporate reputation. We do not enter into transactions or arrangements that detract from this reputation. We endeavour to ensure that our tax objectives do not conflict with our corporate social responsibility objectives.
Our approach to tax
MultiChoice Group Tax, through its board/exco-approved MultiChoice Group Tax Policy, sets out the principles governing the management of taxes by all entities within the group. Through our group tax policy, we have established a formal approach to tax risk management and a tax governance structure that is commonly understood across MultiChoice.
MultiChoice aims to be a committed member of the communities within which it operates and to be a good corporate citizen acting with honesty and integrity in its dealings. We are committed to adhering to all applicable laws and regulations, while safeguarding our interests, including our reputation and brand, as well as the reputations of the entities and brands forming part of the group.
MultiChoice is always guided by corporate policies when dealing with all stakeholders, including non-controlled associates, as outlined in the group's Code of Ethics policy. Further, MultiChoice monitors developments in non-controlled associates and performs ongoing assessments of possible impact to the group.

Total tax contribution per country
Our largest business, MultiChoice South Africa, is domiciled and tax resident in South Africa and its tax affairs follow normal operating and tax practices in that country.
Our MultiChoice Africa Holdings entity (MAH BV), which is domiciled in the Netherlands, predominantly incurs its tax liabilities across the Rest of Africa territories in which it operates.
Our operating entities domiciled in markets across Africa also incur tax liabilities in-country, notably in markets like Nigeria.
The chart alongside shows the split of total taxes collected and paid to tax authorities across key territories

Total tax contribution per country
FY23 (%)


It is important for the regulators across our footprint to try to keep pace with a continuously and rapidly evolving environment and balance this with the need for continuity and stability in their regulatory frameworks.
FY23 | FY22 | |||
Group effective tax rate | ZAR'm | % | ZAR'm | % |
Profit before tax | 921 | 7 094 | ||
---|---|---|---|---|
Taxation and statutory rate of 27% (FY22: 28%) | 249 | 27.0 | 1 986 | 28.0 |
Adjusted for: | ||||
Non-deductible expenses (general) | 1 209 | 131.3 | 483 | 6.8 |
Prior period under/(over) provision of taxes (prior year current and deferred tax) | 127 | 13.8 | 23 | 0.3 |
Non-taxable income (exempt income/income tax allowances) | (112) | (12.2) | (277) | (3.9) |
Unrecognised RoA losses and other unprovided timing differences (temporary differences) | 1 145 | 124.3 | 1 060 | 14.9 |
Assessed losses utilised | (32) | (3.5) | (10) | (0.1) |
Foreign withholding and other direct taxes anduncertain tax positions | 1 222 | 132.7 | 850 | 12.0 |
Tax adjustment for foreign taxation rates and change in tax rates | (96) | (10.4) | 57 | 0.8 |
Tax attributable to equity-accounted earnings | 129 | 14.0 | 38 | 0.5 |
Taxation provided for in the income statement | 3 841 | 4 210 | ||
Reported group effective tax rate: | 417.0% | 59.3% |
The group’s effective tax rate remains elevated, and above the standard corporate tax rate for South African companies of 27% (FY22: 28%). This is due to the losses in the Rest of Africa negatively impacting group profit before tax and distorting the effective tax calculation. Withholding and other taxes incurred in our Rest of Africa segment also negatively impacts the effective tax calculation (notwithstanding that the segment has been loss making in aggregate in recent years).
MultiChoice Group’s effective tax rate increased year on year from 59.3% in FY22 to 417.0% in FY23 mainly due to the following drivers:
- Higher non-deductible expenses added back for tax purposes due to cash extraction losses as well as impairment of equity-accounted investments;
- Losses in Rest of Africa, where deferred tax assets relating to assessed losses have not been raised;
- An increase in uncertain tax positions;
- Higher withholding taxes incurred in our Rest of Africa territories, largely due to increased revenues.
Delivering value to our regulators
It is important for the regulators across our footprint to try to keep pace with a continuously and rapidly evolving environment and to balance this with the need for continuity and stability in their regulatory frameworks. These frameworks need to support a level and competitive playing field without prejudicing certain constituencies in favour of others. Although the group operates in a highly regulated environment, which often results in complex and onerous operating conditions, we remain supportive of balanced, evidence-based and consistently applied regulations that ultimately protect consumers and serve their interests. As such, we remain committed to working with our regulators to ensure appropriate and fair outcomes of ongoing licensing processes and regulatory reviews. In FY23 we paid ZAR280m in regulatory fees across our footprint (FY22: ZAR257m).


Our approach to regulations
The regulatory landscape, particularly in key markets like South Africa and Nigeria, is characterised by constant change and poses challenges for our operations from time to time. Business risks are, however, generally mitigated through actively participating in public consultations conducted by the relevant regulators. However, in some territories consultation is not always enough, which remains a concern, and further engagements with regulators and policy makers are often necessary to clarify the nature and scope of application of intended policy and regulation. We always view litigation as a last resort but are willing to go to court to protect the interests of our stakeholders, most notably employees, suppliers and partners, and shareholders whose interests are all put at risk when adverse regulations are imposed on our business. Ironically, our ability to pay taxes to governments is also impaired by regulations detrimental to the industry and indirectly to the macro-economy.

Nigerian Federal Inland Revenue Service (FIRS) tax dispute
Given historic cases in the Nigerian market involving other corporate entities and the nature and quantum of the claims made by FIRS in this matter, our shareholders and other stakeholders have naturally been concerned about the potential outcome. In addition, we always prefer our engagements with regulatory and tax authorities to be conducted cordially and in a cooperative spirit.
In February 2022, we reached an agreement with FIRS to stay the legal proceedings and for FIRS to commence an integrated tax audit for both the MultiChoice Nigeria and MultiChoice Africa Holdings BV tax matters. The audit process covers corporate income tax, VAT and transfer pricing. As part of the process, the group has made ZAR1.3bn in tax security deposits on a ‘without prejudice and good faith’ basis, with funds to be utilised for future tax payments. We note that the audit is still in progress. Based on the latest facts and circumstances available, no tax provision has been made, nor has a contingent liability been disclosed in our FY23 results. The group maintains its position as a law-abiding corporate citizen and continues to engage constructively with FIRS to bring the audit to a timely and fair conclusion.
Independent Communications Authority of South Africa (ICASA) developments
The activities of ICASA, South Africa’s communications regulator are critically important to our business including to our shareholders, employees, customers, suppliers and the public, all of whom may be impacted by changes in regulations. We therefore actively participate in all relevant ICASA inquiries with a view to achieving a sound regulatory outcome, in the public interest.
With respect to ICASA’s subscription TV broadcasting market inquiry, ICASA issued a media release in May 2022 in which it indicated that it would be ‘rebooting’ this inquiry. ICASA stated that this is meant to enable it to take account of all relevant and current developments to inform a robust, forward-looking regulatory intervention that balances interests of consumers and stability of the broadcasting services market. We welcome this decision which affirms that the regulator is taking note of the changes that have occurred in the audio-visual services industry since the inquiry was launched in 2016. There have been no further developments since this announcement was made.
ICASA’s amended regulations in relation to ‘must carry’ obligations came into effect on 1 April 2022. We accordingly commenced negotiations with the public broadcaster for the carriage of their ‘must carry’ channels. The process is ongoing.
ICASA’s new disability regulations came into effect on 10 October 2022. MultiChoice has prepared rigorously for the implementation of the regulations and we are confident that viewers with disabilities will enjoy the improved offering.
Competition complaints
In the normal course of business, the Competition Commission has been investigating complaints submitted by members of the public or in some instances initiated by itself.
The Competition Commission finalised its investigation into the agreements concluded between MultiChoice South Africa with each of Netflix and Amazon Prime in April 2022 without any adverse findings. In June 2022, the Commission also closed, without any adverse finding, its investigation into a customer complaint regarding alleged discrimination in pricing of commercial airtime. Its investigations of the following complaints are ongoing:
- a consumer complaint of alleged excessive pricing of DStv packages. We price our services competitively taking into account a myriad of factors including our costs which include a material USD component
- eMedia’s complaint emanating from the business no longer acquiring four of its channels at the end of the fixed term commercial channel supply agreement in March 2022
- the SABC’s complaint regarding our acquisition of the exclusive rights to PSL football and Premiership Rugby matches. These rights are acquired from the rights owners for a limited fixed term following competitive selling processes.
The Competition Commission is also conducting investigations into three complaints it initiated regarding alleged collusive tendering in bids for Premiership Rugby, La Liga and UEFA Championship qualification rights, alleged market allocation of the African pay-TV market and alleged allocation of the supply of set top boxes. These investigations are at an early stage. As is customary, we continue to cooperate with the Commission in its investigations and to respond to any requests for information as and when received.
Government’s draft white paper on audio and audiovisual content services policy framework
Purported amendments to the Nigerian Broadcasting Commission (NBC) Code (the Code)
In a pleasing development, the purported amendment to the Code was nullified and set aside by a Federal High Court in Lagos. The Court perpetually restrained the NBC from enforcing the annulled amendment. Further litigation in respect of the annulled code, aimed at pre-empting the NBC from taking action in a case by another broadcaster, is currently ongoing.
Music Rights licences and royalties’ payments for the Rest of Africa
Engagements with international and local collecting societies are ongoing in respect of music rights licences and the royalties payable for territories outside of South Africa. We are confident that we will be able to negotiate agreements which work for our business model.
Broadcasting Regulations review in Kenya
We continue to engage productively on proposed amendments to the Communications Act and draft Broadcasting Regulations with a view to achieving an outcome which is supportive of our business imperatives, particularly in the areas of:
- premium content regulation, and
- stipulations on local FTA channels
Licensing and competition market analysis in Malawi by the Malawi Communications Regulatory Authority (MACRA)
We are pursuing legal redress in court following MACRA’s ruling that MultiChoice Malawi was in breach of its licence and the law in not seeking approval of DStv tariff adjustments. We also continue to engage with the authorities on MultiChoice Malawi’s business model and licensing arrangements, in light of recent findings and recommendations published by MACRA following a market analysis study.
Radio Frequency Spectrum Changes (ITU)
The ITU will this year hold the World Radiocommunication Conference (WRC) where spectrum will be re-allocated to different services. We continue to engage with governments and regulators to highlight the continued importance of spectrum for broadcasting services, specifically spectrum we use for DStv and GOtv across our different markets.
Consumer protection complaints
Various complaints by our customers relating to availability of our services during power outages or due to coverage and spectrum frequency limitations; the provision of our services in bouquets rather than bundles comprising channels selected by individual customers; changes to our bouquets through the addition and removal of channels and marketing of conditional promotional offers made to consumers were investigated and resolved by regulators across the continent without any adverse findings against the business. We are taking active steps to engage our customers regarding our services in order to minimize complaints of this nature.
Key focus areas going forward
In terms of our approach to tax:
- We will continue complying with tax laws and regulations and will collect and/or pay the correct amount of tax to the governments in our markets.
- We are keeping an open dialogue with FIRS in Nigeria to resolve the current tax dispute while actively managing the legal process. We have complied fully with all audit requests and have not raised any provisions or recognised any contingent liabilities to date.
- We will continue building relationships of trust with regulatory bodies and tax authorities.
- We will participate in public processes to discuss and provide input on formulating tax policy.
- We will proactively work with industry bodies, such as the Africa Industry Tax Association, and government associations, including the Africa Tax Administration Forum on tax policy, tax compliance and tax administration issues.
Looking ahead in terms of our regulatory approach:
- We will ensure ongoing compliance with the applicable regulations and best practices across the jurisdictions where we operate through consistent monitoring and evaluation of compliance levels.
- We will participate in reviewing existing legislation and regulations, or in processes where regulators intend to potentially introduce new regulations which may impact our business and industry. The introduction of new legislation and/or regulatory obligations (including laws of general application addressing consumer protection and data protection), tariff control in some territories, and sector-specific regulations are key areas of ongoing engagement with regulators.
- We will renew any requisite licenses as necessary, including our M-Net and MultiChoice broadcasting licenses where both 15-year license terms end in calendar year 2023.