In a workshop held yesterday in Asharqia Chamber:
Zakat and Tax: VAT revenues come second after (oil and gas)
Several positive aspects of the tax, including the improvement of performance and credibility of institutions
Fines against tax evasion or obstruction of collection workers
The General Authority for Zakat and Tax set the date (Thursday 20 December 2018) for mandatory registration of establishments whose sales range between 375 thousand riyals to 1 million riyals annually and currently exempted from the calculation of value added tax, as January is the due date for the start of the application of the tax.
It warned of any violation of the system, especially preventing or obstructing the staff of the Authority in the performance of their duties in this regard.
The supervisor of indirect taxes in the Authority, Jawhar al-Salem, in a workshop entitled (workshop on comprehensive value added tax) that was organized by Asharqia Chamber on Monday (13/8/2018), pointed to the positive results of the introduction of this tax on the domestic market. It includes increasing the level of transparency in the market that gave the owners of institutions opportunities to make the right decisions, which contributed to improving the level of performance and increase the level of credibility of institutions, and opening more jobs in the areas of financial accounting. Therefore, the tax decision is to support the resettlement of jobs as well.
Al-Salem said that the tax rate (5%) is imposed on the outputs collected from customers on all goods and services and this is not deductible by 100%.
There is a tax rate of (0%), which includes some sectors stipulated by the tax system such as medicines and medical devices, international transport and supply of high purity gold bullion, and the export outside the Kingdom.
Some activities are tax-exempt, such as rental of residential property, some health services, education and financial services, and services provided by public institutions. These are activities outside the tax system of origin.
He pointed out that the Authority has set a number of fines for the set of violations that may be issued in the application of the added tax. If any person provides forged documents or documents for the purpose of tax evasion should pay the payment of fines up to 3 times the value of goods and services with the value of the tax.
It also imposed 10 thousand riyals in the absence of application for registration, and a fine ranging between 15% to 25% of the value of tax in the absence of a tax return.
In case of non-payment of the due tax, the system has imposed a penalty of payment of 5% for each month or part of the month because the tax burden is borne by the consumer and not the merchant.
Therefore, the complacency in this matter is huge, and the penalty may be up to 100 thousand riyals in the case of taking a tax bill from an unregistered facility, and 50 thousand riyals for not keeping tax invoices, as well as in the case of preventing or obstructing the staff of the Authority from performing their work.
