By Qaisar Hamid Mutawea
BEFORE he was relieved from his office, former Finance Minister Ibrahim Al-Assaf said the final touches were being put on the approval of the Value Added Tax (VAT).
He made the statements during a meeting of the GCC finance ministers, which was held in Riyadh about two weeks ago.
The minister expected the VAT to be introduced early 2018.
The VAT is considered a new addition to the series of the recent government hectic moves to increase its revenues.
These moves also included the hiking of the tariffs and fees of a number of public services and the abolishment of the subsidies from other government services.
Meanwhile, a number of the government service sectors have started reviewing many of their charges and fees with a view to increasing them in the future and introducing new tariffs.
We would like to ask our dear government sectors, which suddenly started working day and night to increase their fees and introduce new others, to hold their horses.
These sectors should take a deep breath and slow down their pace of hiking their fees and introducing other new ones. They should consider that all these rises have taken place in one year during which the citizens were still under the shock of the cancellation of a number of allowances and the stoppage of promotions and salary increases during the entire next fiscal year.
The citizen, who until very recently, was living in an economic boom was not able to organize his/her spending in the light of the successive hikes of the service fees.
The citizen was hardly out of a bad surprise before he found himself/herself in a new worse surprise. This constituted an immense pressure on him and her.
In the light of the introduction of the VAT, its only natural for the citizen to ask the Finance Ministry about the mechanism of spending the returns of this new tax which will be collected in the future.
When developed countries introduce new taxes, they inform their people about the modality of spending the collected funds to know where their money has been spent.
Some countries even go to the extent of providing their citizens with detailed reports on the sectors and services in which the proceeds of their taxes were spent.
Will our Finance Ministry do the same? Will it provide the citizen with a report showing where the funds collected from the VAT or other taxes has been spent?
The citizen was not concerned with spending in the past but now that he/she has to pay taxes, they will definitely ask where their money was spent.
The citizens will be waiting for a blanket-clear answers from the ministry.
Will the ministry be willing to provide convincing and transparent answers to the questions and enquires of the citizens?
The Saudi citizens were not accustomed to the term «tax» before. It is quite a new terminology for them.
They will pay the VAT and all the other taxes but will the ministry do what is expected from it after collecting the proceeds of these taxes?
