Telecom Authority: Increased tax on mobile phones to start this year

Telecom Authority: Increased tax on mobile phones to start this year

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Thu, 07/02/2013 - 19:48

Increasing the sales tax on mobile phone lines from 15 percent to 18 percent is necessary, and the hike will not be cancelled, said Amr Badawi, head of the National Telecom Regulatory Authority.

The tax increase was approved by the Cabinet but then frozen by President Mohamed Morsy last December.

The tax is necessary to stop the random and “wasteful” use of mobile phones across the nation, Badawi claimed, adding that the taxes would be added to the state budget for this fiscal year and would not be revoked.

During a press conference on Thursday, Badawi said that the government would decide when to begin implementing the tax hike.

The telecom authority is currently studying several strategies to help companies implement the price hike, in order to avoid the kind of outcry that occurred after prices were raised for credit recharge cards.

Badawi noted that tempers were soothed after the recharge card incident when the authority and the Telecommunications Ministry intervened in the matter, and mobile operator Vodafone agreed to go back to the original price.  

One proposed strategy is to limit the the sale and distribution of recharge cards to authorized distributors, since small traders took advantage of the recent price hike and raised the cost of the recharge cards far higher than the price established by the mobile operators.

In December, the Cabinet approved tax increases on a number of commodities, including cigarettes and soda drinks, but later retracted the hikes amid mounting criticism, saying it would hold a national debate on the issue.

Sources told Al-Masry Al-Youm that there is disagreement among the country’s three mobile operators and the authority on who should bear the cost of the tax increase  —  the companies, or the consumers.

Badawi said there are 60 million mobile phone lines sold annually, resulting in a 120 percent saturation of the market.

Edited translation from Al-Masry Al-Youm