Italian Premier Silvio Berlusconi faces a new conflict-of-interest accusation after his government doubled the value-added tax (VAT) applied to the satellite subscription-based TV services of Sky Italia, owned by media rival Rupert Murdoch. Critics accuse Berlusconi of trying to hurt the competition to his family’s Mediaset broadcast empire. Through Mediaset, and the public broadcaster Rai, the Berlusconi family controls 90 percent of the revenue of free-to-air television channels in Italy.
Berlusconi defended the move over the weekend, saying that Mediaset also would also be affected. But analysts point out that Mediaset does not deliver pay television via satellite. Earlier this year, Mediaset launched a digital terrestrial pay television service that now has four channels. This service already has a 20 percent VAT rating, but forms only a small part (about 6 percent) of the total revenues of Mediaset, while Sky Italia relies almost completely on subscriber fees.
Sky had a special deal with the government allowing it to charge just 10 percent VAT instead of the standard 20 percent, but this has been abolished under an emergency law published over the weekend. The increase will affect 4.7 million Sky subscribers who pay between €15 (US$18.91) and €65 for a monthly subscription, depending on the package of channels.
Sky Italia has appealed to parliament not to approve the measure, and is broadcasting messages to subscribers asking them to send protest emails to the Italian government.