A number of mobile phone traders, who are also members in the Communications and Mobile Syndicate, have launched a campaign on social media platforms under the name “Lazim Neksab” (We Must Make a Profit). It aims to increase their profits from the sales of top-up cards and mobile phone devices.
According to Mohamed El-Mahdy, head of the Communications and Mobile Syndicate, the profits made by mobile traders are low compared to the companies, despite traders being the main partners in the success of mobile phone manufacturing companies. Traders acquire 80% of mobile phone sales. In addition, topping up credit on SIM cards is carried out via internet or electronic payment companies like Fawry in stores that provide this service.
He added that it is illogical for traders to achieve a profit of just EGP 5-10 for the sale of a mobile phone worth EGP 2,000, whereas they achieve a maximum profit of EGP 1.9 for every EGP 100 worth of top-up cards, which represents nearly 2%. On the other hand, the state has imposed a 10% tax on each card before applying the value-added tax (VAT).
El Mahdy demanded that the profit margin be moved from 2% to 5%, as well as specifying a share of mobile phone profits at a minimum of 10% per device sale.
However, on Saturday, the Ministry of Supply and Trade launched intensive campaigns on all stores that sell top-up cards.
According to a trader in downtown Cairo, several traders were arrested for selling top-ups at prices higher than those specified. One of the traders was arrested for the possession of top-up cards worth EGP 75,000.
The application of VAT has resulted in the prices of top-up cards being increased: EGP 10 cards now cost EGP 12.5; EGP 25 cards are now EGP 31; EGP 50 cards rose to EGP 60; and EGP 100 to EGP 122. The variance in prices is due to the tax’s application as well as the extra credit and other taxes tagged onto top-up cards.
VAT is imposed on mobile companies at 13% as a general tax price during 2016, in addition to an 8% sales tax to reach a total of 21%, compared to 15% previously.