RIYADH, 10 January 2003 — The Commerce Ministry has set up a committee to discover which companies and establishments are evading payment of zakah and failing to employ the legally required quota of Saudi workers, according to a source at the ministry.
Commercial regulations stipulate that companies and establishments should pay zakah at the rate of 2.5 percent. The level of compulsory Saudization in each company is determined by the total number of workers it employs.
The ministry’s move follows the revelation that hundreds of companies and establishments have been attempting to escape the related regulations by not registering their subsidiaries across the country. This practice has resulted in the concealment of their actual capital and income, as well as concealing the total number of employees.
The committee, which comprises representatives from various departments of the ministry, has deployed five field teams in Riyadh. Its operations will gradually be extended to other parts of the country. The committee will begin its operations by summoning the owners of the companies, which are suspected to have been involved in the violation of the commercial registrations, the source added.
The committee will also look into whether such companies are involved in other violations, such as commercial cover-up, fraud, supplying false addresses, failing to provide after-sale services and operations not included in the registration statement and dealing in fake products.
However, the committee has not been empowered to take measures against violators, the source added. But it will be able to demand that any company found to be in violation of its legal requirements gives an undertaking in writing to cease such activity.
According to regulations, commercial establishments with a capital of SR100,000 or above are required to get a commercial registration stating the kind of their business or trade and the volume of their investment on the basis of which the amount of zakah is calculated. It should also state the total number of workers in it, so that the number of Saudis to be appointed can be determined.