Since July 1St, Saudi Value-Added Tax Has Increased By 10%, Involving 91 Textile Items.

According to the latest information, the Saudi Customs Department announced that import tariffs on some products had been raised since June 20th, and the affected products were reduced to 1449 from 2600 of the previous notices, with an adjustment range of 0.5%-15%.

The tariff adjustment products include:

Animal and plant products: 224 products;

Chemicals and rubber and plastic products: 50 products;

Leather: 27 products;

Paper and rubber products: 38 products;

Textile and footwear products: 91 products;

Minerals, tiles, metals and steel products: 878 products;

Machinery, electrical appliances and auto parts products: 115 products;

Instruments, furniture, toys, works of art and miscellaneous products: 26 products.

Partial list

According to the official website of the Chinese Embassy in Saudi Arabia, the import tariff adjustment of Saudi Arabia has been greatly impacted by the fall in oil prices and the impact of the new crown epidemic. Saudi Arabia's local trade and economic personnel believe that the reasons behind the government's import tariff increase are manifold, including protecting domestic industries and increasing state revenue.

In the face of the new crown crisis and its global economic recession, most countries have launched an expansionary fiscal stimulus plan to boost domestic economic activity. Saudi Arabia unveiled a plan to increase its value-added tax by three times. From July 1st, the rate of VAT increased from 5% to 15% to increase additional revenue.

Raising taxes to deal with the impact of the epidemic

Saudi Arabia's gross national product dropped by 1% in the first quarter.

Saudi Arabia's National Bureau of statistics released 30 statistics show that Saudi Arabia's first quarter gross national product decreased by 1% compared with the same period last year. Data show that the growth rate of non oil sector was 1.6% in the first quarter, but the growth rate of the oil sector was -4.6%.

Analysis shows that the spread of the new crown pneumonia epidemic has suppressed global demand for crude oil, and the curfew and personnel flow control measures initiated in March have also affected the non oil economy such as services and tourism. The International Monetary Fund has predicted in a report that Saudi Arabia's gross national product will decline by 6.8% in 2020.

In the first quarter of 2020, Saudi Arabia's government revenue was only 192 billion rial, down 22% compared to the same period last year. Oil revenues fell 24% from last year to 129 billion rial, while non oil revenues also fell by 17%.

The negative impact of the two quarter of 2020 on Saudi Arabia's economy may be even greater. Before announcing the new austerity measures, Saudi Arabia's budget deficit has reached 15% of GDP.