Saudi Arabia’s King Salman bin Abdulaziz Al Saud has issued a royal decree to extend a number of government initiatives for an additional period, in order to achieve full benefit from the initiatives which were launched since the beginning of the pandemic, the Saudi Press Agency (SPA) reported. These initiatives were set to expire in July.
According to SPA, the extended initiatives focus on supporting Saudi employees, suspending imposition of fines and postponing payment of some government services fees. This step comes as an extension of urgent government measures that contribute to supporting individuals, investors and private sector enterprises, and to enhance their roles as partners in developing the Kingdom of Saudi Arabia’s economy.
The extended initiatives include:
– Supporting Saudi employees in private sector enterprises affected by impact of Coronavirus through unemployment insurance (SANED), which pledges to cover 60% of some Saudi salaries in the private sector.
– Suspending fines related to recruitment.
– Lifting the temporary suspension of private sector facilities to correct activity status.
– Calculating the employment of Saudis in Nitaqat Program immediately for all enterprises.
– Lifting the suspension of wages protection during the pandemic.
– The continuity of providing services for elite enterprises around the clock.
– Postponing the collection of customs duties on imports for a period of thirty days against the submission of a bank guarantee.
– Accepting instalment requests without applying the condition of advance payment.
– Postponing the payment of value-added tax.
– Accelerating payment of VAT refund requests.
– 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.
– 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.
This announcement came on July 2nd, a day after the Kingdom had officially tripled VAT from 5% to 15%, following mounting pressure from COVID-19 on oil prices and the world economy.. Prior to the pandemic, the IMF had already told Saudi Arabia to raise their VAT value to 10%, stressing the importance for the world’s top oil exporter to improve its fiscal position amid lower crude prices, Reuters reported last year.
“Facing a double crisis from the pandemic and oil market turmoil, the economy of the world’s biggest crude exporter is expected to contract 6.8% overall this year, the most in over three decades, according to the International Monetary Fund,” Gulf News reported. “The fund forecasts a return to 3.1% growth in 2021.”