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Kingdom of Saudi Arabia announces Increase in Value Added Tax

Kingdom of Saudi Arabia Announces Increase in Value Added Tax

Kingdom of Saudi Arabia announces Increase in Value Added Tax

  

The Saudi Arabian Government recently announced that the VAT or Value Added Tax will be increased from 5% to 15% as of July 1st, 2020. The increase is one of several measures that have been taken in response to steadily declining government revenues associated with the impact of the Coronavirus on the Saudi Arabian economy. Reports state that the decline in revenues is attributed to increased healthcare costs, lower oil prices, and reduced economic activity.

How will the VAT increase affect Businesses?

Due to the enhancement of VAT rate, most of the businesses in all industries will be affected in Kingdom of Saudi Arabia (KSA). Additionally, business can expect a higher amount of scrutiny from the General Authority of Zakat and Tax (GAZT) because the VAT has become an important component of the revenue to the state. It is time for businesses to review their costs as even those businesses that are exempt shall be affected.


  

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