Telecoms sector braces for VAT: As the date of implementing the value-added tax (VAT) in its second year closes in (we expect the FY2017-18 to be officially ratified tomorrow), the ICT sector is apparently in a flurry to secure regulatory approvals for price changes. Internet service providers will be taxed for the very first time under the VAT in FY2017-18 at 14%, and are looking to pass those on to the consumer after failing to convince the ICT Ministry to delay implementing the VAT for a second year. The government is hoping the VAT on internet would bring in revenues of EGP 700 mn this year, government sources tell Al Borsa.

How will this affect your phone and internet bill? It would appear that internet fees will definitely see a hike, with ICT Ministry sources telling MENA news agency on Sunday that prices for internet ADSL services will increase by 4%. This comes after internet services providers (ISPs) have apparently been pushing for a 15% increase in prices in talks with the National Telecommunications Regulatory Authority (NTRA), according to Al Mal.

…As for telecoms, the only apparent difference this will have on your phone credit is a 1% charge which will be deducted from airtime without charge given on recharge cards. Under a compromise with mobile network operators last year, recharge cards will carry a VAT of 10%, with the remaining 4% being granted to users as calltime. Both the NTRA and ICT Minister Yasser El Kady have promised that will not have any bearing on the retail price of recharge cards.

On a related note, El Kady said that TE Data will start offering internet packages at a minimum of 4 Mbps by the end of this year, Al Mal reports. Based on our humble customer experience, we can only hope that this means they might actually get their data up to the 2 Mbps they keep promising and we keep paying for.