Initiative details
In support of investment in the postal services sector in Saudi Arabia, the Communications and Information Technology Commission (CITC), the General Authority of Zakat and Tax (GAZT), and the General Customs Authority (GCA) launched an initiative to defer the payment of customs duties and taxes on goods imported into Saudi Arabia.
The initiative took effect from 15 March 2021 and allows the postponement of import taxes for a period of up to 21 days following the date of the clearance of the goods for home consumption in the Saudi Market. With this change, Saudi Arabia is now further aligned with similar economies that have operated deferment schemes for importers for many years.
The CITC, GAZT, and GCA have confirmed that this initiative will apply to all postal logistics companies licensed by CITC and that the collection of customs duties and VAT will be deferred in accordance with procedures established through GCA’s system.
Implications
This initiative is a response to the challenges faced by merchants, importers and shipping companies and aims to enhance cash flow, management of their operations and the quality of services provided to the final beneficiaries.
The new mechanism also aims to provide incentives to enhance investment opportunities in Saudi Arabia’s postal logistics services sector and to encourage new entrants to the market. This is line with the Kingdom’s Vision 2030 goal of making Saudi Arabia a leading global logistics platform.
At KPMG, we consider that this change will have a widespread positive effect on the importation of goods by reducing the associated direct and indirect costs. For more information on this topic, or to learn more about KPMG’s Indirect Tax Services, please get in touch.
Get in Touch
Riyadh Office
Wadih Abu Nasr Head of Tax, Saudi Levant Cluster |
Nick Soverall Senior Director, Head of Indirect Tax |
Peter Bourke Senior Director, M&A/ Int’l Tax |
Mohamed Araji Senior Director, FS/ Tax Reimagined |
Ali Sainudheen Senior Director, Domestic Tax |
Raza Qadir Senior Director, Corporate Tax and Advisory lead GCMS and inbound compliance lead |
Oleg Shmal Director, Indirect Tax |
Faisal Tanvir Director, Domestic Tax |
Pascal Cange Director, Trade & Customs Leader, Middle East |
Jeddah Office
Mohamed ElSwefy Senior Director, Family Office & Private Clients |
Salam Eido Director, Indirect Tax |
Muhammad Masood Director, Domestic Tax |
Khobar Office
Tareq Al Sunaid Partner, Head of Domestic Tax |
Mohammad Kamran Sial Senior Director, Domestic Tax |
Anil Bahl Director, Indirect Tax |
Mohamed Gouda Director, Domestic Tax |
