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Saudi Arabia’s introduction of VAT to generate SAR57 billion in revenues

Tax levied will be at five per cent and remains one of the lowest in region

Saudi Arabia’s introduction of value-added tax will generate revenues worth SAR57 billion every year, according to experts.

A few days ago, the Kingdom announced it has started a gradual application of value-added tax, which will be complete two years from now.

Experts told Al Riyadh that the move would help in identifying the real gross product of the private sector, expose commercial cover-ups and put an end to the hidden economy that costs the Kingdom SAR500bn every year.

The Saudi minister of finance has already said the tax levied will be five per cent and remains one of the lowest in the region.

According to experts, VAT encourages savings, investments and growth as well boosting competiveness. They ruled out any adverse effects on national exports.

They called for restructuring the Saudi economy and stopping financial drain through comprehensive and robust management. They said that VAT should serve as a tool used by business owners to increase their efficiency and encourage citizens to spend wisely.