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Saudi drug authority says VAT should not be applied to medicines, vitamins

Saudi drug authority says VAT should not be applied to medicines, vitamins

The kingdom implemented a 5 per cent value added tax rate on January 1

Saudi Arabia’s Food and Drug Authority (SFDA) has warned that a newly implemented value added tax should not be applied to human drugs, imported vitamins and medical devices and products.

The authority’s awareness and information executive director, Dr Abdulrahman Al-Sultan, said it was closely monitoring the commitment of companies and pharmacies to not charge the 5 per cent tax on registered products.

Consumers have been instructed to report any violations to the General Authority of Zakat and Tax.

The announcement that medical products and devices would not be taxed under the new regime on January 1 came last month.

Read: Saudi Arabia to exempt medicines and medical equipment from VAT

A full list of registered medical products and devices is available on the SFDA website.

Saudi Arabia implemented the VAT on most products and services as part of a wider GCC initiative to boost government coffers. The UAE was the only other country in the bloc to bring the tax into force on January 1.

Other GCC members are expected to follow over the next year.

Read: Oman postpones VAT introduction until 2019

The kingdom is expected to raise $9.3bn from the new tax in 2018.

Read: Saudi expects $9.3bn from VAT in 2018

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