Colombian Tax Law Stirs Controversy

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Colombia's recent tax changes have put the
country's cable industry at a disadvantage to rival direct-to-home (DTH) platforms,
industry players there said.

Tax reform at the end of last year slapped a 16 percent
value-added tax on a new range of products and services, said Luis Fernando Santos,
president of Casa Editorial El Tiempo, a publishing company that has investments in both
DTH and cable.

The new tax has become a hot topic in pay-TV: While the
legislation isn't yet crystal clear, it appears that cable operators will have to pay
the tax, but DTH operators will not.

That gives Colombia's DTH industry an unfair advantage
over cable, said Santos.

"It totally confuses the marketplace. Something has to
be done to create equality in both types of TV," he said.

Casa Editorial El Tiempo holds a 24 percent stake in TV
Cable, which claims to be the largest cable operator in Bogotá. It also has a 13 percent
stake in Sky Colombia, the local unit of the panregional DTH platform Sky Latin America.

Santos said that there was no deliberate attempt to create
disparity within Colombia's pay-TV market.

"Those who drew up the [new law] were probably not
aware of the effect it would have. It was not an intentional situation," he said.
"It was something that surprised everyone, and no one foresaw the consequences."

"We have to work within the law. But at the moment we
[cable operators] are being put at a disadvantage vis-à-vis other pay TV services,"
said Juan Carlos Garcia, TV Cable's general secretary.

Although the new tax went into effect at the beginning of
this year, TV Cable and other cable companies had not been required to pay the first
installment of the tax until this month, he said. Garcia is urging authorities to
immediately clear up the confusion they have created.

Those were sentiments echoed by Colombia's national TV
regulator, the National Television Commission (CNTV).

"At the moment nothing is very clear for anyone. The
[tax authorities] have to define which products and services this tax should cover,"
said Juan Carlos Gomez, who heads the CNTV's pay TV division.

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