VAT on mobile phone service

Vodafone Malta Ltd said that for this month it would be absorbing the additional three per cent VAT charge.

However from February 1, Vodafone will start charging the additional VAT to customers.

For contract customers, Vodafone's prices will be increased by three per cent from February 1.

E-talk (prepaid) customers will have the additional VAT service charge deducted on topping up of their prepaid vouchers.

Therefore, a prepaid customer with a Lm5 voucher will have Lm4.85 topped up in his account, meaning that 15 cents (being three per cent of Lm5) is allocated for VAT purposes. Prices will remain the same as now.

"Rather than increasing the prices of individual services for etalk customers, such as increasing the cost of SMS to 2.5c among others, we will deduct the per cent VAT service charge from the cost of the top up voucher," said Paul Bahia, chief commercial officer at Vodafone Malta Ltd.