Cell phone tax not to increase before deciding added value: official
mobile phone network operators Mobinil, Etisalat and Vodafone logos

CAIRO: There is no separate law suggested by the Ministry of Finance for increasing cell phone tariff tax, a ministry official told Youm7.

The official clarified that sales tax value decided in the beginning of July by President Abdel Fatah al-Sisi included increasing taxes on cell phone calls, but only taxes for cigarettes and alcoholic beverages were approved.

The official added to Youm7 that the ministry is working on the added value law. He said this law will increase taxes on cell phone calls adding that the current tax is 18 percent. He said the ministry is not done with the final draft of the added value law adding that it will probably stay the same throughout this year.

Law no. 58 for 2014 issued by Sisi increased sales tax on cigarettes, 50 piasters for local packs and 2 to 2.75 EGP for imported packs. As for taxes on alcoholic beverages, the tax increased from 200 EGP to 400 EGP for each 100 liters.

The official said that amending the sales tax will save 5 billion EGP in the new budget.

A government source in the National Telecommunication Regulatory Authority (NTRA) said that canceling energy subsidies will cost cell phone companies extra expenses that would reach 4 billion EGP annually, Anadulo reported Saturday.

The source added that Egyptian cell phone companies Mobinil, Vodafone and Etisalat allocate about 40 percent of operating expenses to financing energy, namely diesel and electricity necessary for operating their networks.

The source said that cell phone companies spend 8 billion EGP ($1.1 billion) annually and he expects the cost to reach 12 billion EGP ($1.6 billion) after canceling energy subsidies.

External Affairs and Legal Director of Vodafone Egypt Khaled Hegazy denied Tuesday any increase in recharge card prices. He added that any possible increase will affect calls themselves and not recharge cards, Al Mal reported.

A source in Etisalat Egypt said that the company does not intend to raise prices of recharge cards in the coming period.

Additional reporting by Mona Diaa.

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