Saudi Arabia Unveils Tourist Tax Refund Scheme To Boost Tourism
Category: Markets

Saudi Arabia’s New Initiative to Enhance Tourism

In a move to attract more visitors and enhance its global competitiveness, Saudi Arabia has launched a tourist tax refund scheme. The initiative aims to draw more international tourists and position the kingdom as a major global destination.

Public Consultation on Tax Regulations

In late August, the Zakat, Customs, and Tax Authority initiated a public consultation on proposed amendments to tax regulations. The changes are intended to improve compliance with value-added tax (VAT) laws while providing relief to specific VAT payers.

Updates on VAT and Excise Duties

While Saudi Arabia does not levy personal income tax, it introduced excise duties in 2017. VAT, initially set at 5% in 2018, was increased to 15% in 2020, further boosting the kingdom’s revenue. The tourist refund program now aims to incentivize more tourist inflow by easing tax burdens on visitors.

Tourist Refund Initiative and Impact on the Tourism Sector

The tourist refund program is part of a broader strategy that includes the recent suspension of licensing fees for hotels, hotel apartments, and resorts. This is aligned with Saudi Arabia’s Vision 2030, which aims to increase tourism’s contribution to GDP to 10% by the end of the decade. With such initiatives, Saudi Arabia aims to position itself as a leading global tourism hub.

Saudi Arabia’s Vision for Religious Tourism

In line with its ambitious goals, Saudi Arabia seeks to attract 50 million religious tourists annually by 2030, driven by key reforms in tourism and infrastructure development.

Foreign Investment and Economic Reforms

Starting in January, Saudi Arabia plans to simplify foreign investor registration, aimed at boosting foreign direct investment (FDI). Additionally, the Capital Markets Authority is evaluating the elimination of the 5% withholding tax on interest payments to corporate bondholders, making investment in Saudi Arabia more attractive.

Corporate Tax Regulations

Currently, non-GCC investors face a 20% corporate income tax, which can rise to at least 50% for oil and hydrocarbon producers. These tax adjustments are part of Saudi Arabia’s ongoing effort to balance its economy while attracting global investors.

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11 Sep, 2024 0 736
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