Saudi VAT enforcement: 55 days to go as businesses urged to follow new rules

Updated 05 November 2017

Saudi VAT enforcement: 55 days to go as businesses urged to follow new rules

JEDDAH: All businesses have been advised to make sure they understand the new rules on value-added tax (VAT) and be ready for their application on Jan. 1, 2018, which is in 55 days.
The General Authority of Zakat & Tax (GAZT) has urged businesses to read the regulations which can be found on the tax’s official website.
According to the rules approved by GAZT’s board, a 5 percent VAT will be imposed on most goods and services at each stage of the supply chain from production and distribution to the final sale.
The regulations also defined the goods and services that will be exempt, zero-rated and out of scope.
Activities subjected to a zero percent VAT include the supply of medicines and medical equipment specified by the Ministry of Health and the Saudi Food and Drug Authority, the supply of gold and silver for investment purposes provided they are at least 99 percent pure and tradable in the Global Bullion Market, and the export of goods to outside the Gulf Cooperation Council (GCC) region.
Goods and services exempt from VAT, according to the new rules, include financial services such as dealing in money or securities, providing credit or credit guarantee for customers, and life insurance and reinsurance contracts. The renting of residential property is also exempt from VAT.
Services provided by government agencies as public authorities, such as the issuance and renewal of passports and driving licenses, will be out of the tax’s scope.
The VAT official website (vat.gov.sa) provides tools and information that support businesses and help them prepare for the application of VAT, in addition to visual aids, registration and VAT application information, and the list of goods and services subject to VAT.
The move is in line with an International Monetary Fund (IMF) recommendation for Gulf states to impose revenue-raising measures including excise and value-added taxes to help their adjustment to lower crude oil prices, which have slowed regional growth.
It is estimated that the VAT’s imposition will raise between $7 billion and $21 billion annually — or between 0.5 percent and 1.5 percent of regional GDP (gross domestic product).
Speculations surfaced in social media about a delay in the implementation process, but Rashid Al-Fowzan head of CNBC-Arabia TV channel, has made it clear that the VAT implementation will go as planned on Jan. 1, 2018.
Abdulrahman Al-Hussain, spokesperson of the Ministry of Commerce and Investment, has warned businesses against implementing the tax before the scheduled date. He threatened them with serious consequences following concerns raised by a section of the public.


Saudi health minister promises to procure tested vaccine

Saudi Health Minister Tawfiq Al-Rabiah. (AP)
Updated 20 October 2020

Saudi health minister promises to procure tested vaccine

  • COVID-19 cases continue to decline in Saudi Arabia

JEDDAH: Saudi Health Minister Dr. Tawfiq Al-Rabiah on Monday said the Kingdom will procure vaccine for the novel coronavirus once it is confirmed to be safe and effective.

He said research on the vaccine is underway in a number of countries and the Saudi health authorities are following the developments.
The number of coronavirus disease (COVID-19) cases continues to decline in the Kingdom with the recovery rate from the illness rising to 96 percent. The minister attributed the decline on the “commitment to health precautions.”
“I also thank my fellow health practitioners for their wonderful efforts,” Al-Rabiah said.
Commenting on the second and stronger wave of COVID-19 in some countries, he said it was due to a lack of “commitment to social distancing” and failure to wear masks and taking other precautions.
He ruled out any leniency on part of the government in its fight against the virus. The minister said it is necessary to abide by precautionary measures to keep the virus at bay.

FASTFACTS

• Saudi Arabia recorded 381 new infections on Monday.

• With 16 new fatalities, the virus-related death toll has risen to 5,201.

“We (all) are in one boat, and the failure of some affects everyone, so we must work together” to check the spread of the virus.
He also advised people who show COVID-19 symptoms to visit Tetamman (rest assured) clinics.
“Appointments can be made through the ministry’s Sehaty app, and anyone who has any questions or wants to consult a doctor can call 937,” the minister said.
Saudi Arabia recorded 381 new infections on Monday. The total number of COVID-19 cases has reached 348,583 since the beginning of the outbreak in the Kingdom.
The Health Ministry said 16 more people died due to complications caused by the virus raising the death toll to 5,201. The ministry also reported 357 new recoveries. The total number of recovered cases has now increased to 328,895.