Mohammad Al-Jadaan has clearly stated that there is no plan at present to reconsider VAT in short or medium term.

No Plan to Review or Change VAT in KSA (Saudi Arabia)

15% VAT was initiated from July 2020 in Saudi Arabia as a part of additional measures taken to offset the economic impact of the coronavirus crisis due to the decline in government revenues resulting from low oil prices, reduced economic activities and increased cost of healthcare services.

The G20, under the presidency of Saudi Arabia, has launched several initiatives that will help fight corruption in the economy.

“The group has framed a number of principles to review the foundations of global trade, and three meetings of G20 commerce ministers were held in the current year itself,” he added.

Private Education, Buying First House & Private Health Centers are the three services where the cost does not increase more than 850,000 Saudi Riyals as per GAZT.

VAT was increased from 5% to 15% starting 1st of July due to the impact on Saudi economy due to pandemic COID-19 situation

VAT to be borne by the State for the above mentioned three services in KSA

The GAZT has invited taxpayers wishing to obtain more information about tax regulations in the Kingdom and to comply with their provisions, to visit the official website of the authority (gazt.gov.sa), or to communicate with the authority through the unified call center on the number (19993), or via Twitter’s Customer Care account of the authority (@GAZT_CARE).

King Salman has extended economic aid to private sectors along with providing government initiatives for additional time period to achieve full benefits in this pandemic situation the country is going through.

King Salman New Initiatives for Private Sectors, VAT, Salary

This decision has been announced for supporting Saudi Arabian citizens, private sector companies & investors, To enhance private sector employees’ role in developing the Saudis economy, minimizing the financial and economic impact of the coronavirus on the public in KSA.

New Initiative by King Salman on VAT, Salary & Private Sectors

1) Supporting All Saudi employees in private sector companies affected by impact of Coronavirus through unemployment insurance (SANED).

2) Suspending All fines related to recruitment.

3) Lifting the temporary suspension of private sector facilities to correct activity status.

4) Re-Calculation of employment of Saudis in Nitaqat Program immediately for all companies.

5) Lifting the suspension of wages protection during the coronavirus pandemic.

6) The continuity of providing services for elite clients & businesses around the clock.

7) Postponing the collection of customs duties on imports for a period of thirty days against the submission of a bank guarantee.

8) Accepting installments without applying any conditions of advance payment.

9) Postponing the payment of value-added tax.

10) speeding up payment of VAT refund requests.

11) Partial exemption from the financial compensation for the expiring visas of residence and extending the period of using exit and re-entry visas for one month, with an additional month if needed.

12) Enabling business owners, for a period of two months, to postpone the payment of value-added tax, excise tax, income tax, and the submission of Zakat declarations during coronavirus pandemic.

As per the announcement VAT (Value Added Tax) in Saudi Arabia will be increased from 5% to 15% starting July 2020.

Ministry has tripled the amount from 5% to 15% to balance the economical condition in the country.

Along with this Ministry also announced stopping of Cost of living allowances for public sector workers starting June this year.

Increase in VAT (Value Added Tax) from 5% to 15% in KSA

These measure are into place to mitigate the negative effects of the pandemic crisis from a health as well as economical perspective.

The Government has also cut down few project budgets from it Vision 2030 and due the dip in Oil Prices which is the main source of revenue and economic growth government has to take the above measures.

The government has also taken some measures to reduce the expenditure amounting to SR100 billion which include a number of Vision Realization Programs and major projects for the fiscal year 2020.

Not Only Saudi Arabia but many of the countries are facing economical imbalance due to Corona virus.

So, those who have money and assets please don’t waste it unnecessary on unwanted things and save it. If you want to spend, at-least spend it people who are in need or give it to charity as future times may bring economical imbalance.

Allah is the only savior and Insha Allah he does the best.

Chariman of the Committee on Foodstuff at the Jeddah Chamber of Commerce and Industry (JCCI), expects a 30%-40% increase in the prices of fruits, dairy products and vegetables.

He also added retail shops in Saudi were making 25% – 30% profit on fruits & vegetables prior to introduction of Value Added Tax (VAT) in the kingdom and Now their profit margin will increase, he added.

Mutassim Abu Zinadah, chairman of the traders of fruits & vegetables, warned that some retail shops may attempt to hike prices following the introduction of VAT and increase in fuel prices.

“There was a difference of about 20% in the prices of fruits and vegetables in the central market and retail shops before the introduction of VAT,” he said, adding, “Now the difference may go up to 30% after VAT.”

Family budget is being drained out not only by hike in the prices of foodstuff but also by increased transportation fares, private school tuition fees and school bus charges.

VAT Taxpayer Lookup to identify Business Supplier is VAT registered or Not

Alternatively you can also search by:

– TIN (Taxpayer Identification Number) comprised of 10 digits, which can be found on VAT registration certificate of supplier
– CR (Company Registration) comprised of 10 digits, which the supplier should provide you upon request
– VAT Certificate No. comprised of 15 digits, which can be found on VAT registration certificate of supplier

To perform the search, you should follow the 3 steps:

• Step 1: Select your search parameter (VAT Account Number or TIN or CR or VAT Certificate No.)
• Step 2: Enter the exact parameter number in the search field
• Step 3: Click on “Search” button to obtain the results

VAT Taxpayer Lookup

Interest or lending fees charged with an implicit margin for finance will be exempted from value added tax (VAT).

GAZT said that interest fees charged on Lonads, Credit Cards, Finance leasing, Hire Purchase, mortgages all are exempted from VAT.

Rumors about ATM withdrawals, the GAZT officials told the workshop that customers will not be charged for withdrawing or transferring money from their accounts using ATMs.

However, the 5-percent tax will be imposed on banks’ administrative charges such as the issuance of checkbooks, statements of accounts and safety deposit boxes and the customer will have to bear this expense.

Moreover, rental prices of residential properties, life insurance contract and issue or transfer of a debt security, equity security, or any other transferable document recognizing an obligation to pay a monetary amount to the bearer are also exempt from the VAT.

Value Added Tax (or VAT) is an indirect tax imposed on all goods and services that are bought and sold by businesses, with a few exceptions. VAT is applied in more than 160 countries around the world as a reliable source of revenue for state budgets.

Good news is that VAT will not be applicable for Housing Rents and Governmental Services in the Kingdom. Though some of the Government services are not adherent to the VT include passport and Driver’s License renewal.

Registration of VAT accounts has been started and VAT Awareness is being done everywhere. In GCC, Saudi Arabia will be the first state to implement VAT from Jan 2018.

General Authority of Zaka & Tax has confirmed that VT (Value Added Tax) wil not be levied on th Salaries in the kingdom. Value added Tax will only be added to Good & Services as informed by the Ministry.

VAT not to be applied on Salary in Saudi Arabia

Yes it is confirmed that VAT is levied on merchandisers & Services rather employees wages ut not on Salaries.

Earlier, there were speculations that VAT may be levied on salaries to the employees.

VAT will be imposed on imports & exports at all stages which reaches consumers finally.

GCC is composed of Kuwait, Bahrain, Qatar, Oman, Saudi Arabia and the United Arab Emirates (UAE).

In Saudi Budget 2017 it was recommended that a 5% VAT will be charges without any changes in prices. All the six GCC countries have agreed to the implementation of Value Added Tax (VAT) and selective taxes for Energy Drinks, Soft Drinks and Tobacoo this year.

Earlier there was no VAT system at all in Saudi Arabia, but 2018 will be the year VAT Taxes will be applied in Saudi.

Introduction of a VAT in the kingdom will be one measure to strengthen the indirect tax structure.

You can red more details on How does VAT work in Saudi Arabia.