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Oskar lessens the impact of the VAT rate increase

28. November 2003

Customers of telecommunication companies are preparing to dig deeper into their wallets from the beginning of next year. Effective from January 1, 2004, the VAT rate on telecommunication services will be increased from 5% to 22%. This change will affect Oskar’s customers too, although Oskar‘s call rates will not be changed. “We have to respect the new legislation. However, Oskar will try to accommodate its customers wherever possible in order to make the transition to the increased VAT rate as smooth as possible,” says Chris Robbins, Director Pricing at Oskar.



Customers of telecommunication companies are preparing to dig deeper into their wallets from the beginning of next year. Effective from January 1, 2004, the VAT rate on telecommunication services will be increased from 5% to 22%. This change will affect Oskar’s customers too, although Oskar‘s call rates will not be changed. “We have to respect the new legislation. However, Oskar will try to accommodate its customers wherever possible in order to make the transition to the increased VAT rate as smooth as possible,” says Chris Robbins, Director Pricing at Oskar.

Prepaid customers are in the forefront. Due to the VAT rate increase, Oskar will introduce new replenishment voucher denominations of 500 Kc and 1,200 Kc (VAT included), replacing the old vouchers of 400 Kc and 1,000 Kc as of January 1, 2004. Customers who will have unused vouchers left at the end of 2003 don’t need to worry about losing their credit. Customers may recharge their old vouchers until March 31, 2004. When recharging with an old voucher, Oskar will credit the customer’s account with 17% of the voucher denomination.

Likewise, all existing Oskarta customers will be credited with 17% of their account balance as of December 31, 2003. “This ensures that our customers will receive the exact amount of services that they paid for before the increased VAT rate took effect,“ says Igor Prerovsky, Vice President Brand & Communications at Oskar.

Oskar will also introduce new ATM and M-Payment replenishment denominations. As from February 2004, customers will be able to choose between 250, 500, 1,200 and 2,400 Kc options. The lowest replenishment denomination will be increased from 200 Kc to 250 Kc. Whereas in the past, the lowest denomination replenishment did not affect the customer’s credit validity, now even a 250 Kc replenishment will keep the customer’s credit active for up to 13 months.

For postpaid customers, the increased VAT rate will result in thicker bill envelopes being delivered to their mail boxes in January 2004. Every postpaid customer will receive 2 tax documents, one for services used in December 2003 and the other for services used in January 2004. Along with the tax documents, the customer will receive a summary statement comprising data for both periods. While the original 5% VAT will apply to all services used in December, the customer’s January usage will be already subject to the increased 22% VAT.

Business customers who pay VAT will continue to be eligible to claim the VAT paid when filing their value-added tax return.