No VAT on expat remittances in Saudi Arabia, say bankers

Updated 18 December 2017
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No VAT on expat remittances in Saudi Arabia, say bankers

RIYADH: Senior bankers clarified on Sunday that money sent home by expatriate workers will not be taxed under the value-added tax (VAT) reform initiative to be launched by the Saudi government on Jan. 1 next year.
It was also announced that companies and businesses have only three days left to register and obtain their dedicated VAT account numbers.
Saudi Arabia’s General Authority for Zakat and Income Tax (GAZT) has urged businesses with annual revenues of more than SR1 million ($266,640) to register for VAT before the deadline of Dec. 20, 2017.
“The deadlines for companies with annual revenues between SR1 million and SR375,000, however, has been extended by a year until Dec. 20, 2018,” according to a GAZT statement.
“All businesses including commercial organizations and banks have been advised to make sure they understand the VAT rules and be ready for their implementation after 15 days from now,” said Syed Ahmed Ziauddin, a senior banker who heads the financial institutions and public sector group at Bank Al-Jazirah in Riyadh.
He said: “Aljazirah Bank is fully ready to start from Jan. 1 ... and we are going to apply VAT on our service charges.”
He said that all commercial banks have geared themselves to comply with the VAT regulations. “The banks have also educated their customers about VAT besides advising them about various services that will come under the purview of VAT,” said Ziauddin, while adding that the remittances will not be taxed under the VAT system.
“Money remittance outflows will be exempted,” said Abdullah Ali Nasser Alfuraiji, chief of the Tahweel Al-Rajhi in Riyadh. Alfuraiji made it clear that “the 5 percent VAT tax would be levied on the remittance service fees, rather than the remittances themselves.
He emphasized that “Tahweel will be charging 5 percent of SR18, which we charge as remittance fee for sending funds to India. Hence, the rise will be nominal with customers required to pay 9 halalas extra for remitting money to India.”
The Tahweel chief added that this will be negligible, but will differ from country to country.
Referring to the implementation of the VAT and the levies imposed on remittances, Ahmed Mohammed Al Enazi, general manager of Enjaz Banking Services, the remittance arm of Bank Albilad, said: “There will not be any impact on remittances.” He also confirmed that “5 percent VAT will be imposed on service charges... say like 5 percent of SR16 in case of India and 5 percent of SR20 in case of Pakistan.”
“The 5 percent on banks’ service fees will be paid by the person sending money as per guidelines of the General Authority of Zakat and Tax (GAZT),” said Ahmed.
Banks and remittance centers in the Kingdom charge varying fees on remittances sent to different Asian and European countries.
The imposition of 5 percent VAT “on service charges, not on remittance amounts” was also confirmed by Anwar Ahmed Wajid Khajja, manager of products and partners at Fawri, the remittance wing of Bank Aljazirah in Riyadh.
Referring to the benefits of VAT especially those collected by banks and remittance centers, Cenon Nonie C. Sagadal Jr., marketing representative of Rizal Commercial Banking Corporation (RCBC) of the Philippines, said: “VAT is a welcome move with a slight increase in remittance fees, which will eventually benefit the remitters and the institutions.
“With the government meeting its financial goals as a result of VAT collection, more employment opportunities will be created not only for Saudis but also for expatriates within the framework of the Saudi Vision 2030.”


Height of adventure: Treading the ‘Edge of the World’ near Riyadh

Updated 19 April 2018
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Height of adventure: Treading the ‘Edge of the World’ near Riyadh

  • Cliffs in Tuwaiq were formed as a result of the movement of the Arabian plate toward the northeast because of the spread of the Red Sea rift
  • Several prominent Saudi tour companies offer daylong excursions to the site

Thrill seekers and fitness gurus all over the Kingdom will be pleased to know that their choices for weekend activities have increased. 

Several tour operators in Riyadh have started offering trips to the area known as the Edge of the World, making the location more accessible than ever.

With the country’s obesity rates on the rise and many citizens growing more concerned about their physical health and stress levels, people are seeking ways to maintain their fitness without having to restrict themselves to the monotony of a gym routine.

One such solution that has steadily increased in popularity over the past year is hiking, which many have embraced as being much more exciting and fulfilling than spending hours on the treadmill. And most popular of all for hiking and other fitness activities in a natural setting is the magnificent landmark of Jabal Fihrayn, more commonly known as the Edge of the World.

Described as a “window framed by rock,” the Edge of the World offers stunning views of the valley below, a lush grove of acacia trees teeming with wildlife and vegetation. The spot is well-known for being a favorite of visiting picnickers.

Hikers can choose from several trails of varying levels of difficulty, making their way to the top of the Tuwaiq escarpment to take in the magnificent views at the top of the trail, where the colossal cliff faces drop off to reveal the dizzying height from the valley below. In addition to the rich wildlife unique to the location, you can also find samples of fossilized coral and raw mineral deposits in certain areas of the valley.

The cliffs in the areas were formed as a result of the tectonic movement of the Arabian plate toward the northeast because of the spread of the Red Sea rift situated 1,000 km to the west of Tuwaiq.

Due to the increasing popularity of the site, the authorities have built a hardtop that leads to the gates of the sites and arrangements are in place to protect the area and its natural treasures. 

Several prominent Saudi tour companies offer daylong excursions to the site. The more intrepid explorer also has the option to go alone; though past visitors recommend that solo travelers take an all-terrain, 4x4 vehicle and extra precaution. Visitors can spend the day at the site and leave before 6 p.m. (when the gates are closed for the night) or stay behind for a night of camping to enjoy the sunset and the breathtaking celestial views of a star-studded night sky.

Nora Alfard, amateur hiking enthusiast and two-time visitor to the location, was quick to offer praise about her trip. 

“The trip out there was a bit tiring, but totally worth it,” she said. “The views are stunning, and the hiking itself is not that difficult. Most people should be able to make it to the top without too much trouble.” She said she was likely to go a third time, and encouraged others to do the same.

The Edge of the World is roughly 100km northwest of Riyadh, about 1.5 hours’ drive from the capital. Visitors should be prepared for at least 30 minutes of hiking, possibly more depending on your trail and your level of fitness and experience. Previous visitors recommend bringing water and snacks, and stress the importance of dressing appropriately — hiking shoes only!

Decoder

What is hiking?

Hiking means a long, vigorous walk, usually on trails in the countryside. Day hikers generally carry at least food, a map or a GPS navigation device.