Over the past months, Mohamed Essam, the owner of a mobile phone shop in the city of Mansoura, bought a number of devices from customers after making sure they were free of tax charges through the government’s “Telephony” app. The app showed that these phones were not subject to any taxes, but a week ago he was surprised to find the network cut off from them, after taxes were imposed retroactively, even though the app’s data had confirmed that they were free of any obligations.
Mohamed’s case was not exceptional; the same thing happened to a large number of traders and consumers, causing an acute crisis in the market. Customers began demanding to return the devices on which charges had suddenly been imposed, while the original sellers refused to bear responsibility, arguing that the sale had taken place after verification through the app, and that what happened afterwards was none of their concern.
Mohamed tells Zawia3: “When I tell the original seller that the phone now has a tax on it, he simply replies: (I checked at the time and there were no charges on it, and the rest is none of my business). We, as shop owners, are stuck in the middle: we cannot return the devices to the sellers, and we have no solution for the customers whose devices have stopped working or who were surprised by high charges.”
He adds that exorbitant taxes were imposed on some devices without prior warning, explaining: “A single device alone had a tax of EGP 24,710 imposed on it, even though I bought it after official verification that it was free of charges. There is no logic whatsoever in imposing taxes in this random way.”
He believes that these decisions have placed traders in direct confrontation with customers, who demand to return the devices or to hold the shop fully responsible, calling on the state to intervene swiftly to rescue the market from a disruption that threatens its stability and inflicts mounting losses on traders.
The mobile phone trade sector is witnessing a state of severe confusion and accumulating losses, as a result of the retroactive imposition of customs duties on imported devices. This decision drove a large number of shop owners in various governorates to close their shops temporarily and go on strike, in protest at what they described as sudden measures.
Speaking to Zawia3, Amir Shawky, the owner of a phone shop in Sohag Governorate, says that most shops in the governorate have stopped working for days because of the direct losses they have suffered, noting that some customers were surprised when their phones, which they had bought months ago, stopped working after customs duties were imposed on them, which led to traders being held fully responsible.
He continues: “I bought 18 devices myself, and it was clear from the app that they were not subject to any charges, but after a month or two, taxes were imposed on them while they were with the customer. Customers do not accept that these are government decisions; instead, they come straight back to us. In a case such as an iPhone 13 Pro Max, I had made a profit of only EGP 1,000 on it, while a tax of EGP 20,250 was imposed on it, that is, twenty times the profit margin. This makes it impossible to continue the business.”
He adds that the taxes imposed on the eighteen devices he owns amounted to around EGP 350,000, against profits not exceeding EGP 18,000, saying: “I am a small trader, but there are traders who own hundreds of devices, and their losses have multiplied enormously. Since I closed the shop, customers have been contacting me every day because their devices have stopped working, and if I am forced to bear these amounts, I will go bankrupt. I ask customers either to return the devices as they bought them, or to wait in the hope that the state reverses the decision.”
He stresses that the damage does not affect traders alone, but extends to consumers, who will face a significant rise in phone prices in the coming period. Some customers, he says, found that their devices suddenly stopped working even though they had bought them months ago, which led to altercations inside shops, amid what he describes as “randomness in implementing the decision”, explaining that some phones that had been officially registered on passports and whose fees had been paid at airports stopped working, while other similar ones continued without obstacles, an indication of a flaw in the implementation mechanism.
Shawky explains that the decision is not related to the phone’s model or year of manufacture, but to the date on which it entered Egypt, explaining that the devices that entered after 1 January 2025 are the ones covered by the decision. But he criticises the method of counting, stressing that some devices had Egyptian SIM cards inserted in them before being officially registered, and were therefore considered to be in violation despite the fees having been paid. He says: “If there were a unified tax, even if it reached EGP 10,000 on an iPhone 13 Pro Max, we could deal with it. But buying a device for EGP 62,000 and then having a tax of EGP 20,500 imposed on it represents an unbearable burden. We as traders are in a real crisis, and we demand a fair solution, because the continuation of the decision in this form threatens to destroy the entire sector.”
Ahmed Raafat, the owner of a mobile phone shop in Assiut Governorate, faced similar losses following the retroactive imposition of the tax on phones, which pushed him to close his shop and travel outside the governorate for a few days, to avoid confrontations with customers who demanded that he take back the devices they had bought over the past months, after charges were imposed that had not been announced at the time of purchase.
Ahmed affirms that a number of shops have been on strike for days in protest at the sudden decision. He says, speaking to Zawia3: “We bought the phones from customers and traders, and registered them through the official programme of the National Telecommunications Authority, and they were not subject to the tax, so we sold them at the market price on that basis. Then we were surprised by the retroactive imposition of the tax on devices that had previously been activated at airports using passports, which put us in a complicated position.”
Although he cannot determine precisely the size of the losses his shop has suffered, he expresses his displeasure at the way the decision was implemented, without prior warning or official clarification, which left shop owners in a state of confusion, unable to reassure customers or limit their losses.
Over the past week, messages that many mobile phone users received from the National Telecom Regulatory Authority (NTRA), demanding that they pay customs duties on phones that had been operated with local SIM cards without registration, caused a state of chaos in the mobile market, since they came despite earlier assurances that the decision would not be applied retroactively to devices activated before 1 January 2025, which prompted many traders to declare a strike and close their shops temporarily.
At the end of last December, the Egyptian authorities had launched a system for registering and regularising phones coming from abroad so that the customs tax on them could be paid, under the name of the “Telephony” app, and the Customs Authority set the fees imposed on phones coming from abroad at a value representing 38% of the phone’s price, to be applied to the owner’s second phone.
Last January, the National Telecom Regulatory Authority announced the activation of an electronic system for registering imported smartphones via the “Telephony” app and collecting the fees imposed on them, and gave owners of imported mobile phones a period of 90 days from the date the decision took effect to pay the fees imposed on the phone if they were resident in Egypt, or to leave with their phone if they were a visitor.
On 5 April, the National Telecom Regulatory Authority called on users owing mobile phone device fees to pay those fees promptly, stating that two days remained before the end of the specified period, after which the National Telecom Regulatory Authority would stop non-compliant devices whose fees had not been paid from working on all mobile networks operating in Egypt.
Egyptians abroad
The financial losses were not limited to traders and consumers inside Egypt, but also affected many Egyptians residing abroad, who were surprised to find tax charges imposed on their mobile phones even though they used them outside the country.
Ahmed Ali, who lives outside Egypt, expresses to Zawia3 his displeasure at a tax being imposed on his phone even though it did not enter Egyptian territory, noting that the phone was used only via the roaming service with a SIM card belonging to one of the Egyptian networks. He says: “I live abroad, and I visit Egypt for only one month a year. I use an Egyptian line while abroad via international roaming, so how can a tax be imposed on me for a device that was not operated inside Egypt? Merely connecting to an Egyptian network while roaming does not mean that I have entered the country.”
Ahmed questions the fairness of imposing the tax on using the phone during his short holiday, explaining: “Even when I use the phone inside Egypt, it does not exceed one month each year. It would be logical for expatriates to be included among the cases of temporary exemption, especially since many of them do not bring in new devices regularly, but use their personal phones only during the holiday.” He proposes activating a mechanism that allows expatriates an exemption of three months, renewable on each visit, provided that the devices are registered with national ID number or passport details, to ensure transparency and safeguard the rights of both the state and the citizen.
For her part, Arwa Adel, an Egyptian living abroad, complains about the way the tax decision on mobile phones is being applied, particularly with regard to short-term visitors. She recounts to Zawia3 that she arrived in Egypt on 1 July, and used the Egyptian SIM card as soon as she arrived to check on her family, then registered the phone as she was leaving the airport. She adds: “The employee told me that everything was in order, but after about two months I received a message stating that a tax had been imposed on my phone, with a 90-day deadline for payment. I contacted the complaints service, and they informed me that the reason was using the SIM card before completing the registration, even though I did it on the same day I arrived.”
She asks why there are no clear instructions informing visitors not to use the SIM card before registration, explaining that the Egyptian SIM card itself is automatically closed if it is not used for three months, which forces the expatriate to use it as soon as they arrive. She stresses how difficult it is to reach the competent authorities, noting that she sent messages via WhatsApp to the National Telecom Regulatory Authority and called the official numbers without receiving a reply. Arwa calls for a simplified mechanism for registering expatriates’ devices, one that guarantees their right to temporary exemption and spares them sudden measures that hinder their use of their phones during short visits.
Protecting the market and preventing smuggling
In a related context, the Mobile Phones and Communications Division of the Chamber of Commerce affirmed its full support for the state’s efforts to regulate the governance of the entry and import of mobile phone devices, in a way that contributes to strengthening discipline within the Egyptian market and combating random practices, stressing in a statement it published on 26 July the importance of implementing what Dr Mostafa Madbouly, the Prime Minister, announced during the press conference, and what was published on the official page of the Presidency of the Council of Ministers, as well as on the official page of the National Telecom Regulatory Authority, regarding the decision not being applied retroactively.
The division stressed the need for strict adherence to this government clarification, out of concern for the interests of traders and importers who had complied with the legal procedures in force before the decision was issued, and to avoid any financial damage that might befall them as a result of applying the decision to shipments that preceded the new regulations, expressing its hope for continued coordination with the relevant authorities in a way that strikes a balance between regulating the market and supporting the telecommunications sector, which is one of the most important vital sectors in the Egyptian economy.
For his part, Engineer Ehab Saeed, head of the General Division of Communications and Financial Technology at the Federation of Egyptian Chambers of Commerce, considers that the National Telecom Regulatory Authority’s decision to impose a tax on imported phones aims to prevent smuggling, regulate the market and protect formal traders from illegitimate competition, explaining that the Authority announced the implementation of the decision at the beginning of the year and granted a grace period of three months, and that during this period it was confirmed that phones on which the tax was paid would have the service activated, while the service would be blocked on phones on which the tax had not been paid.
He tells Zawia3: “Most of the phones that faced problems with tax collection were bought from ordinary individuals returning from abroad, without official invoices, which runs counter to sound commercial practice. The trader must protect his rights by buying devices from official agents or importers with certified invoices, just as the consumer is required to keep the purchase invoice.”
The head of the division points out that some traders resorted to circumvention during the grace period, by inserting SIM cards into unregistered phones and then returning them to the display windows, in an attempt to get around the system, which he considers unacceptable manipulation, stressing that through this decision the state seeks to regulate the mobile phone market and ensure fair competition among traders, and emphasising that traders must commit to buying devices from reliable sources with official invoices, and be content with normal profit margins, in order to preserve their rights and the rights of their customers.
Regarding some phones appearing on the Authority’s app as exempt from the tax and their status later changing, Saeed explains that the system received around 690,000 phones, among them 60,000 devices under suspicion, and it was later discovered that the problem was confined to only 13,000 devices, noting that some individuals resorted to taking phones out of Egypt and then bringing them back in order to circumvent the decision and obtain the exemption, but that these attempts do not succeed given the digital oversight that allows precise monitoring through the telecom companies and the unified registration system, which leaves no room for circumvention, thereby enhancing the efficiency of applying the new controls and serving the interests of both the market and the consumer.
For its part, the National Telecom Regulatory Authority affirmed that the exemption would continue for any mobile phone device brought into the country with a passenger through the customs channels, during the trial period announced with the launch of the mobile phone governance system, revealing that the number of devices exempted with passengers arriving from abroad is estimated at around 650,000 mobile devices from the beginning of the year to date.
The Authority said, in a statement on developments in the procedures of the mobile phone governance system and on what had been raised about mobile devices brought in with a passenger from abroad being stopped retroactively and the exemptions established in this regard being halted, that “in light of the periodic monitoring of the mobile phone governance system, a number of cases of manipulation and fraud in this regard were detected, which resulted in the suspension of a number of devices estimated at around 60,000 devices on suspicion that they were not entitled to the exemption, and these devices have been suspended pending the completion of the examination procedures”.
The statement explained that the Authority had studied and analysed those cases over the past days, and it was confirmed that there were cases of manipulation and fraud involving 13,000 devices that had obtained exemptions by illegitimate means and in violation of the regulatory procedures issued in this regard, which requires the suspension of those devices to continue, while it was also confirmed that 47,000 mobile devices were legitimately entitled to the exemption, and those devices have been reactivated.
No retroactive tax
For its part, the Tax and Investment Experts Association affirmed that applying the tax to mobile devices imported from abroad may not take effect retroactively, because this would constitute a constitutional violation and have a negative impact on Egypt’s international reputation, stressing, in a statement, the need to adhere to what Dr Mostafa Madbouly, the Prime Minister, announced, namely that devices registered before 1 January are not subject to the tax.
In statements to Zawia3, Ashraf Abdel Ghani, head of the Tax and Investment Experts Association, affirms that the tax imposed on mobile phones imported from abroad is not applied retroactively, explaining that the date on which the decision took effect is January 2024, and that it is not legally permissible to impose any taxes on devices that entered the country before this date.
Abdel Ghani explains that the Tax Experts Association stressed, in its statement issued last Friday, the need to respect settled tax principles, which stipulate that any tax takes effect from the date the law is issued and does not extend to the past, which had previously been confirmed by the Ministry of Finance and the Council of Ministers, noting that in its statement the association also demanded that the customs exemption system granted for the personal phone be amended so that it becomes once every three years instead of once in a lifetime, justifying this by the rapid development of the phone industry, which drives users to change their devices within short periods of time.
He says: “Regarding the crisis that arose because of taxes appearing on phones that had previously been classified as not subject to tax, Abdel Ghani said that the relevant authorities carried out a comprehensive count that led to the temporary suspension of 60,000 phone lines, then the reactivation of 45,000 lines after the data were reviewed, while there are still 13,000 violation cases being verified.”
The head of the association explains that these violations may result from attempts at circumvention by some parties, such as bringing phones into the country after the specified date and trying to prove that they entered before it in order to avoid paying the tax, noting that this is what caused the inconsistency in the data of the “Telephony” app run by the National Telecom Regulatory Authority, which may show inaccurate exemptions, and pointing out that the value of the tax on imported phones amounts to 38.5% of the value of the device, distributed as follows: 14% value added tax, 10% customs duties, 5% state resources development fee, and 5% fees for the National Telecom Regulatory Authority.
Abdel Ghani considers that this high rate aims to encourage the purchase of locally produced phones, noting that there are factories in Egypt that currently cover 80% of the local market’s needs, among them global companies operating under local production licences, such as “Samsung” and “Oppo”, stressing that this policy aims to support national industry and reduce dependence on imports, and thereby to contribute to preserving foreign currency reserves by reducing pressure on the dollar.
Regarding the strikes organised by mobile phone shop owners in a number of governorates, including Beheira, Menoufia, Assiut and Sohag, Abdel Ghani explains that the crisis stems from misunderstanding or from manipulation of the devices’ entry dates, noting that whoever brings in a phone without paying its tax and then protests by going on strike is the one who bears responsibility for the violation, concluding his statements by affirming the association’s full support for applying the law, and the importance of all parties bearing responsibility, in a way that strikes a balance between protecting consumers’ rights, encouraging local products and ensuring tax fairness in the Egyptian market.
Meanwhile, Dr Adel Amer, a legal and economic expert and head of the Egyptians Centre for Economic and Social Studies, believes that the tax imposed on imported mobile phones is not applied retroactively, as some are claiming, but applies only to devices that entered the country after 1 January 2024, considering that the decision comes within the framework of the state’s plan to confront mobile phone smuggling and to regulate the process of registering and activating devices imported from abroad on Egyptian networks, through a new customs system approved by the Ministry of Finance in coordination with the National Telecom Regulatory Authority.
He tells Zawia3: “The tax, which stands at 38.5%, includes several components, namely: 14% value added tax, 10% customs duties, 5% state resources development fee, and 5% fees for the National Telecom Regulatory Authority, and it is a fixed rate that is applied as soon as the phone is operated with an Egyptian SIM card inside the country, if it was not officially declared when it entered Egyptian territory”, noting that any citizen arriving from abroad is legally permitted to bring in one personal phone exempt from taxes every three years, on condition that it is declared to the customs officers at the airport and is not activated on the Egyptian network.
He adds: “As long as the phone remains unregistered or operates on a foreign SIM card, it is not subject to the tax. But as soon as an Egyptian SIM card is inserted in it, the tax is applied immediately, and the decision does not distinguish between new and used devices; every phone imported from abroad whose entry was not registered, or which was not operated on the Egyptian network, before 1 January 2024 is subject to the tax regardless of its year of manufacture or its condition, and this applies to all “non-local” phones, while phones manufactured inside Egypt are exempted from these procedures.”
Regarding the controversy over the earlier messages issued by the “Telephony” app run by the National Telecom Regulatory Authority, which indicated that some phones were not subject to taxes, Amer explains that the tax assessment is not determined by the app alone, but is made on the basis of the date on which the device was activated on the local network and the data on its entry into the country, which is now being applied strictly in order to close the gaps that were exploited in smuggling, noting that some traders did not comply with the declaration and payment procedures, which led to taxes being imposed later when the operation of these devices was detected, and affirming that the law does not provide for applying taxes retroactively, but rather activates the tax as soon as the conditions for its application are met, including the date and activation on the network.
Amer concludes his statements by stressing the need for traders and consumers to be aware of the legal controls, saying: “The problem is not in the law itself, but in the failure to comply with the procedures from the beginning, and whoever is harmed should turn to the competent authorities to submit what proves their position.”
A parliamentary move
Coinciding with the crisis, MP Dr Hisham Hussein, a member of the House of Representatives, submitted a parliamentary question to the government, represented by the Ministry of Finance, regarding the problem of applying the tax on mobile phones imported from abroad retroactively, noting that the Communications and Mobile Division of the Cairo Chamber of Commerce had complained about the decision to apply the tax on mobile phones retroactively, announcing its total rejection of this decision, particularly since it contradicts what the Prime Minister affirmed in this regard, namely that the tax would not be applied retroactively.
The MP says: “We agree with the decision to apply customs duties on mobile phones imported from abroad at a rate of 38% of the phone’s value, which comes as part of the procedures of the electronic system that the government launched in January of this year and which aims to reduce the losses of the state’s public treasury caused by customs evasion”, affirming that the National Telecom Regulatory Authority launched services for finding out whether or not there is a tax on phones, but that the problem lies in the retroactive application.
The MP explains that applying the tax retroactively on imported phones causes a major problem, particularly since a large number of users bought phones by legitimate means and at high prices, and applying the tax again is unacceptable, calling on the government to review with the Ministry of Finance the importance of adhering to the decision to collect the tax, but without retroactive effect.
Amid the crisis caused by applying the tax to some imported phones, traders and consumers find themselves trapped between a crisis that some of them attribute to inaccurate application of the decision and an economic reality that cannot bear further burdens. While the state holds on to its justifications of confronting smuggling and regulating the market, the voices of those harmed by what they considered poor implementation are growing louder, demanding fair solutions that protect their rights and preserve the stability of one of the most vital sectors in the Egyptian market. With the strikes continuing and anger escalating, the future of the mobile phone trade sector remains suspended between the need to bring the chaos under control and the necessity of salvaging what remains of trust in the relationship between the citizen and the state.
Editorial correction: The first version of the report’s introduction stated that the tax applies to devices that entered the country after 1 January 2024; the correct date is 1 January 2025, which is when the system for registering imported phones via the “Telephony” app began to be applied, as stated in the body of the report.
