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Saudi Arabia: Increased customs duties, effective 10 June 2020

Saudi Arabia: Increased customs duties

The General Authority of Saudi Customs on 27 May 2020 announced increased rates of customs duties for certain commodities and goods.

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The customs duties are to increase at rates ranging from 0.5% to 15% for various products, beginning from 10 June 2020.


Products potentially affected by increased customs duty

The products potentially affected by the increased customs duty rates include poultry, meat, dairy products, certain consumer products, some types of drinks and vegetables, spare parts, chemicals, building materials, and vehicles.

For example:

  • Foods and beverages such as poultry and meat products, live sheep and goats, fish, cold-water shrimps and prawns, dairy products, juices, yogurt , dairy spreads, vegetables and olive oil. The customs duty rates for these products may increase from the current levels of 0%, 5%,12%, and 20% to rates ranging from between 6% and 25%, depending on the product.
  • Chemicals such as carbon, silicon, zinc oxide, sulphonamide, propylene copolymers. The customs duty rate for these products may increase from current rate of 5% to 6.5%.
  • Building materials such as tiles, marble, travertine and alabaster, pipes and tubes, electric wire and cable. The customs duty rates for these products may increase from the current rates of 5% and 12% to rates ranging between 12% and 15%.
  • Vehicles (other than railway) such as private vehicles and emergency vehicles. The customs duty rate for these products may increase from the current rate 5% to rates ranging 5% and 7%, depending on the product.


KPMG observation

Any customs rate increase will present an unexpected increase in costs for importers, manufacturers, and those involved in the supply chain, including the final consumers. The implications of the customs duty rate changes on intra-Gulf Cooperative Council (GCC) trade must also be evaluated. Importers into Saudi Arabia as well as any other businesses that have a substantial import element in their chain of supply need to review their current product list to evaluate the impact of the rate increases on their supply chains and then determine which party, and to what extent, will cover the additional cost. There may be options to reduce the effect of the customs duties increases for businesses (for example, through reviewing tariff codes applied, making use of customs exemptions and reductions available, using bonded warehouses and tolling arrangements, or evaluating alternative logistics models).

 

For more information on this topic or to learn more about KPMG’s Trade & Customs Services, contact:

Doug Zuvich
Partner and Global Practice Leader
T: 312-665-1022
E: dzuvich@kpmg.com

John L. McLoughlin
Principal and East Coast Leader
T: 267-256-2614
E: jlmcloughlin@kpmg.com

Andy Siciliano
Partner and National Practice Leader
T: 631-425-6057
E: asiciliano@kpmg.com

Steve Brotherton
Principal and Global Export and Sanctions Leader
T: 415-963-7861
E: sbrotherton@kpmg.com

Luis (Lou) Abad
Principal, Washington National Tax
T: 212-954-3094
E: labad@kpmg.com

Irina Vaysfeld
Principal
T: 212-872-2973
E: ivaysfeld@kpmg.com

Amie Ahanchian
Principal
T: 202-533-3247
E: aahanchian@kpmg.com

Christopher Young
Principal
T: 312-665-3229
E: christopheryoung@kpmg.com

Gisele Belotto
Managing Director
T: 305-913-2779
E: gbelotto@kpmg.com

George Zaharatos
Principal
T: 404-222-3292
E: gzaharatos@kpmg.com

Andy Doornaert
Managing Director
T: 313-230-3080
E: adoornaert@kpmg.com

Jessica Libby
Managing Director
T: 612-305-5533
E: jlibby@kpmg.com

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