The new rates announced by Vodafone are at best a miscalculation, at worst a sly attempt to increase their tariffs behind our backs.

They are saying that from every Lm5 prepaid voucher, they shall deduct 15c (three per cent of Lm5). This is being done to account for the increase in the VAT rate from 15 per cent to 18 per cent, as announced in the budget.

The correct amount to be deducted is calculated as follows. Since Lm5 is the price including VAT, it amounts to 118 per cent of the untaxed price, which works out at Lm4.237. Adding 15 per cent to the untaxed price, we get Lm 4.873.

In simple language, this means that a price of Lm5 with the new VAT rate is equivalent to a price of Lm4.873 under the old VAT rate. Therefore, Vodafone should only deduct 12c7 from every Lm5 voucher.

For the same reason, prices for contract customers should be increased by 2.6 per cent and not three per cent as has been announced.

If Vodafone fails to adjust its new rates, an intervention by the Malta Communications Authority is in order.