Saudi Arabia should consider raising a value added tax (VAT) to 10% from the current 5%, according to the International Monetary Fund (IMF).
The International Monetary Fund (IMF) have stressed the importance for the world’s top oil exporter to improve its fiscal position amid lower crude prices.
In a report published yesterday, the IMF said that a tighter fiscal policy is needed, as the Saudi Arabia budget deficit is forecast to grow in the coming months.
Saudi Arabia introduced a 5% VAT rate in January 2018 to improve non-oil revenue generation after a plunge in oil prices from mid-2014 bruised its revenues. The IMF “suggested that consideration be given to raising the VAT rate from 5% to 10%” in consultation with the GCC.
Earlier this year The General Authority of Zakat and Tax (GAZT) Board of Directors approved amendments to various articles of the Value Added Tax (VAT) Implementing Regulations in Kingdom of Saudi Arabia (KSA).
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