Confusion as VAT comes into force


Saudi Gazette

— Confusion prevailed on Monday as Saudi Arabia introduced Value Added Tax (VAT).

The 5% sales tax applies to most goods and services.

Traders and customers spent time understanding the VAT billing procedures.

Grocery stores and eateries had problems collecting 5% VAT in halalas on low-priced items.

Dairy and bakery products delivered early in the morning to grocery stores were the first ones to have invoices showing 5% VAT.

Many grocery stores had to sell goods without charging 5% VAT, though they had paid VAT to suppliers.

“How am I going to collect 5 halalas for a croissant or a bottle of water which is sold for SR1,” asked Adnan Mohammed, a salesman in a grocery store.

“We didn’t charge VAT on first day because we have to first understand billing procedure, the tax calculation method and explain the same to customers,” he added.

However, superstores, hypermarkets and shops having Point of Sale (POS) machines to accept digital money did not have any problem in collecting VAT.

Some greedy traders hiked prices many times on fresh and perishable consumer items. It was not clear whether they had paid VAT or not as they didn’t display any registration certificates from the General Authority of Zakat and Tax (GAZT).

People can lodge complaint regarding VAT violations by calling 19993.