After the implementation of VAT by January 01, 2018, effective airtime which is also known as talk-time or mobile credit for prepaid customers will be reduced. For instance, the airtime on an SR 100 prepaid voucher will marginally dip to SR 95 after the deduction of SR 5 as VAT.
For post-paid users, VAT is likely to be added to bills.
It is not clear whether VAT will be charged on the overall bill, including the subscription amount or only the on-call costs.
However, roaming charges within Gulf Cooperation Council (GCC) countries are exempt from VAT, said sources.
According to the latest report of the Communications and Information Technology Commission (CITC), there are 43.63 million mobile subscriptions, 24 million data users, and 3.75 million landlines in the Kingdom.
VAT is coming at a time when the tariff for data usage has been increasing and lucrative economy options for data bundles are shrinking. Data subscription is high in the Kingdom.
Source: Saudi Gazette