Italian Government Doubles VAT on Pay-TV

ROME, December 2:
Management at SKY Italia is protesting a last minute VAT increase on pay-TV
subscriptions passed by the Italian government.

The Italian government
doubled the sales tax on pay-TV subscriptions to 20 percent as part of an
emergency fiscal stimulus package announced Friday.

SKY Italia management
argues that this increase unfairly penalizes the pay-TV sector and favors the
commercial broadcaster Mediaset, which has a small
pay-TV operation. The family of Prime Minister Silvio
Berlusconi controls Mediaset.

This increase comes at a
particularly bad time, first because the Italian economy is already in a
downturn and consumers are feeling the pinch, and secondly because pay-TV
subscriptions tend to increase during the holiday season—SKY Italia
packages are given as Christmas presents to friends and family members.

SKY Italia management
fears the higher sales tax will impact subscriptions and this could force the
pay-TV operator to scale back its investment in movies and sports.

As part of the stimulus
package, the Italian government also 25-percent tax duty on movies showing
explicit sexual acts.

—By Anna Carugati