The Saudi Initiative for Mitigating COVID-19 Impact: Zakat and Tax Authority

The Saudi government has implemented a swift and quick response to the developing COVID-19 crisis, constituting a series of initiatives across multiple authorities aiming at mitigating the impact of the novel virus and limiting its effect on businesses in the private sector. The Kingdom’s effective policies ranked it first globally in consumer confidence during the month of March with 65.1 points according to Ipsos Global Consumer Confidence Index, ahead of China, the US and India. 

The General Authority of Zakat and Tax was among the multiple governmental authorities that launched major initiatives to control financial aftermath and limit damages. Postponement initiatives were taken between the dates March 30 and June 30, 2020, and they include the following: 

  1. Postponement of VAT and selective goods tax for 3 months 
  2. Postponement of submission of Zakat reports and the respective payments 
  3. Postponement of outstanding VAT through the General Saudi Customs Authority for persons registered with the Authority for imports related to their economic activity, with permission to pay through the tax declaration in the duration of import. 
  4. Postponement of outstanding selective goods tax through the General Saudi Customs Authority for persons registered with the Authority for the product types subject to the tax, on which the tax suspension does not apply according to the regulations those who have container licenses are subject to. The postponed tax is paid to the General Authority of Zakat and Tax by applying on the Authority’s digital platform during the timeframes announced. 

The General Authority of Zakat and Tax also announced a series of initiatives allowing flexibility in regulations in the time period between March 18 and June 30, 2020. These regulations are: 

  1. No restrictions on granting Zakat certificates on the duration of decoration of the financial year 2019 for 3 months. 
  2. Expansion in admissions for installments requests without down payment for 3 months.
  3. Postponement of executing suspensions of services and monetary blocks, with necessary measures taken to extend postponement periods for heavily affected organizations. 
  4. Suspension of penalties for delays in installments payments during the extension period. 
  5. Exemptions of penalties related to tax declarations and payments related to it for all types of taxes and Zakat. 
  6. Acceptance of installments requests without down payment during the period of the initiative. 
  7. Accelerating payments for refund requests through a committee of those who have requested refund.