Saudi records 187 VAT violations among schools, bookstores

Saudi Arabia’s General Authority for Zakat and Income (ZAKA) has recorded 187 violations of value added tax (VAT) during field campaigns targeting private schools, training institutes and bookstores in the country.

The targeted field campaigns were carried out by inspection teams during the first week of the new school year in various regions of the kingdom, the official Saudi Press Agency (SPA) reported.

Schools in Saudi reopened after the summer break in early September.

Violations were found to include irregularities in the tax receipt, an invoice issued by a person who is not registered, the non-collection of VAT, and the absence of a tax number on the bill.

Through the field campaigns, the ZAKA seeks to emphasise to establishments about the importance of implementing VAT, following up on how to implement it, and ensuring the correct application of various VAT procedures, the report stated.

The authority has implemented more than 9,000 field campaigns so far, targeting a number of sectors, from the first day of the application of VAT in the kingdom, in its efforts to ensure compliance of enterprises with the regulations of VAT.

It also urged businesses to use the VAT application, which allows them to know if they are registered.

Saudi Arabia – along with the UAE – implemented 5 per cent VAT on January 1, 2018.

All companies with annual revenue exceeding SAR1m are required to register for the tax. After the first phase, companies with annual revenues of between SAR375,000 ($100,000) and SAR1m have until December 20, 2018 to register.

Companies that fail to submit their declaration in time face fines of between 5 per cent to 25 per cent of the value of tax that was due to be paid.

In addition, the penalty for not paying tax in any given month is equivalent to 5 per cent of the unpaid tax.

Read more: VAT violators in Saudi face SAR10,000 fine

The tax is expected to bring in SAR35bn ($9.3bn) during its first year, according to officials.

Read more: Saudi expects $9.3bn from VAT in 2018