Saudi Arabia: 1,685 VAT infringements in first week

Saudi Arabia: 1,685 VAT infringements in first week

Saudi authorities have recorded a total of 1,685 violations of a hike in the value-added (VAT) tax, a week after the increase took effect in the kingdom, the Saudi news agency SPA has reported.

In May, Saudi Arabia announced tripling the VAT from 5 per cent on goods and services as part of measures to mitigate economic fallout from the impact of the new coronavirus and a fall in oil prices.

The increase went into effect on July 1.

Field teams from the Saudi General Authority of Zakat and Tax (GAZT) have since mounted a large-scale inspection campaign nationwide to make sure that businesses comply with the new VAT regulations. Inspections targeted retailers, restaurants and general trade outlets.

Most of the exposed violations were related to failure to collect the tax or charging fees less than the due tax.

The capital Riyadh has topped the list of detected infringements with 201 violations, followed by the Red Sea city of Jeddah with 181 and the Governorate of Al-Ahsa in eastern Saudi Arabia with 155.