VAT set to increase fuel prices

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Saudi Gazette

JEDDAH
— Motorists in the Kingdom will be required to pay additional amount for fuel from Jan. 1 as Kingdom is to set to implement Value Added Tax (VAT). The standard rate of 5 percent of VAT will be added to fuel sale, according to taxing sources. General Authority of Zakat and Tax (GAZT) has been working in this regard, they added.

A motorist filling fuel worth SR20 will have to shell out an extra riyal as VAT.

After the imminent hike in fuel prices soon — an 80 percent increase was deferred temporarily — VAT will surge further. But, even after the proposed prices and VAT are implemented, fuel prices in the Kingdom were much lower when compared with other Gulf countries.

The 5 percent VAT on fuel is likely to cause confusion among motorists in the initial stage with the calculation of halalas and many may opt for a round figure to fill up their fuel tanks.

Fuel consumption is the highest in the Kingdom as road transport plays vital role in the country; motorists consume about 89 million liters petrol per day.

Car rental companies are also preparing cost calculation based on VAT. Meanhwile, the General Authority of Zakat and Tax (GAZT) has urged businesses with annual revenues of over SR1,000,000 to expedite their VAT registration process and ensure their readiness for its implementation.

The authority urged businesses to register through the official VAT website VAT.GOV.SA.

More than 60,000 business houses have registered for VAT since the registration opened on Aug. 28.


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