Saudi Arabia expects to raise SR 35 billion ($9.35 billion) in revenue from the implementation of value-added tax (VAT) in 2018, according to Hamoud Al-Harbi, VAT project manager at the kingdom’s General Authority of Zakat and Tax (GAZT).
Speaking to the Emirates News Agency (WAM), Al-Harbi noted that the revenues raised through VAT will be used by the Saudi government for infrastructure and development projects.
Additionally, he noted that the GAZT will take action against those who have still not registered for VAT, and is working with the ministry of commerce and investment to carry out inspections and identify irregularities in VAT’s implementation throughout the kingdom.
According to analysts, Saudi Arabia and the UAE – the only two GCC countries to have begun implemented VAT – could collectively raise as much as $21 billion from the five percent tax in 2018, equivalent to 2 percent of GDP.
In December, Riyadh posted budget deficits totaling $260 billion over the last four fiscal years, and Saudi officials to not expect the kingdom to balance the books before 2023.
Subscribe to Arabian Business' newsletter to receive the latest breaking news and business stories in Dubai,the UAE and the GCC straight to your inbox.