5 - 11 October 2000

VAT on phone calls costs Maltacom Lm0.5m

by Franco Aloisio

The Value Added Tax imposed on local phone calls has cost Maltacom around Lm500,000, the company’s chairman Maurice Zarb Adami said yesterday.
One of the measures introduced in last year’s budget included a 15 per cent VAT levy on local phone calls from a fixed line to another fixed line. Customers paid five per cent of the levy, while the remaining 10 per cent would be absorbed by Maltacom.
Mr Zarb Adami said that when the figure was worked out proportionally, Maltacom would have paid 8.5 per cent VAT on each account.
“This means that we had to fork out around Lm500,000. However, Maltacom can state that there was no significant reduction in the number of calls made by our customers,” he said. Mr Zarb Adami added, however, that the company had received guarantees from the government – by means of a legal notice – that Maltacom’s VAT bill would be compensated and adjusted by the end of the year. He said Maltacom would be compensated because now the company would be entitled to VAT refunds. Mr Zarb Adami said Maltacom would also be entitled to further VAT benefits in coming years.
Maltacom’s Chief Executive Officer Stephen Muscat explained that VAT had to be charged on residential customers only, as the tax for businesses was refundable. Mr Muscat said that despite the five per cent surcharge, there was no decrease in telephone usage by residential customers.
Mr Muscat said arrears of customer payments ran into millions of liri, and a substantial portion of these arrears had already been paid after Maltacom issued a stiff warning.
Over the past two months, customers were warned that unless they paid outstanding debts, the service would be suspended.
Mr Muscat and Mr Zarb Adami yesterday addressed a press conference to announce Maltacom’s sponsorship of the IT&T fair, which will be held at the Naxxar Trade Fair Grounds between 11 and 15 October. Maltacom’s sponsorship amounts to Lm4,600.
Mr Zarb Adami said the IT&T fair was a good occasion for the telecommunications and IT industry to exhibit its products and services. He said today’s telecommunications and IT industry is heading towards convergence technology, whereby the various means of communication become linked to each other.
Mr Zarb Adami said that during the fair Maltacom will be launching a number of special offers to customers such as a second phone line, free voice mail, star services, ISDN and the Gcard.