Saudi Arabia may see SAR 35 bln in new revenue from VAT

The planned introduction of a GCC-wide value-added tax (VAT) in the range of 3 to 5 percent will likely generate as much as SAR 35 billion in new revenue for Saudi Arabia’s economy, Al Madinah newspaper reported, citing new estimates from the Saudi Arabian Monetary Agency (SAMA), the kingdom’s central bank.

SAMA shared its projections during a recent workshop on the new tax system, which is also expected to add anywhere from 1 percent to 1.6 percent to the country’s gross domestic product (GDP).

Earlier this year, GC C government officials confirmed that VAT will be implemented in the region by 2018.

VAT will be applied on a wide range of goods and products; however, basic food items, and the healthcare and education sectors are exempt from the tax.