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Monday, 15 April 2019

FinMin decides to raise stamp tax on mobile phone bills to EGP 12

EXCLUSIVE- FinMin committee examines stamp tax overhaul: A Finance Ministry committee is looking would could be a “large number” of amendments to the outdated Stamp Tax Act, with one likely change involving doubling the annual stamp tax on pre-paid mobile phone lines to EGP 12, a senior government official tells Enterprise. The ministry has been mulling whether to hike the stamp tax to as much as EGP 24 per year and is looking at the overall impact of the change. It would then hand the proposed amendments to cabinet for review. The changes could impact all stamp taxes except for the one on advertising, which includes a 15% stamp tax on traditional ads placed by individuals and a 20% rate on ads bought by companies. We noted earlier this year that the ministry is looking to impose the 20% stamp tax on social media and online ads.

No decision yet on scrapping separate EGP 50 levy: A senior official told us last year that the ministry is considering cancelling a separate EGP 50 levy on new mobile phones. The levy was introduced at the start of the fiscal year but was blamed for weighing down mobile network operators’ (MNOs) sales without a substantial return to the state coffers. The ministry eventually reached a preliminary agreement with the MNOs to do away with it. Doubling the stamp tax was believed to be one of two considerations to make up for scrapping it, with another being introducing a completely new service fee. The ministry has still not taken a final decision on cancelling the levy, but will proceed with the stamp tax hike regardless.

Mobile subscriptions in Egypt are falling: This all comes amid a drop in the number of mobile subscribers. The figure stood at 93.78 mn by Q42018-end, falling to 93.48 mn users in January. This is a 7.8% y-o-y decline from 101.32 mn in January 2018.

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