Prince Mohammed seeks solution to new zakat levy on banks

Crown Prince Mohammed bin Salman has asked officials to resolve a dispute with banks facing higher zakat claims, Reuters reported, citing sources familiar with the matter.

Banks are contesting the additional zakat fees, which amount to about SAR 9.8 billion, or $2.6 billion.

A committee from the General Authority for Zakat and Tax (GAZT), the Saudi Arabian Monetary Authority (SAMA) and other entities has already been formed to look into the matter, per the Prince’s directives to resolve the issue.

The committee, led by SAMA’s former governor Fahad Al-Mubarak, has handed its recommendations to the Royal Court. A solution could be expected within weeks, ahead of FTSE potential inclusion decision, the sources said.

The Kingdom is hoping to earn emerging market status in 2018 from index providers FTSE and MSCI, moves that could bring in about $40 billion in total foreign investments, analysts previously said.

According to data compiled by Argaam, the Council of Economic and Development Affairs, chaired by the Crown Prince, has reviewed the updates on the cabinet’s decisions concerning the new zakat levy on banks and financial firms.