Saudi Arabia will allow violators of its anti-concealment system to correct their mistakes during the upcoming period until August 23, according to the Kingdom’s Minister of Commerce Majid bin Abdullah al-Qasabi.
“This is a valuable opportunity for those wishing to rectify, and I invite them to take advantage of it,” al-Qasabi said.
Correcting the situation enables the beneficiaries to be exempt from the penalties prescribed in the anti-concealment system and its consequences. Beneficiaries will be able to pay the income tax retroactively, according to a statement by the Ministry of Commerce.
Businesses that violate the Kingdom’s anti-concealment system can apply online through mc.gov.sa to rectify their mistakes.
After August 23, harsher penalties will be strictly applied.
The ministry said that commercial concealment is a “wasted hidden economy estimated at 300-400 billion Saudi riyals, and upon correcting the situation, these amounts will have an added value to the national economy.”
Concealment leads to economic crimes, including but not limited to money laundering, commercial fraud, and the absence of fair competition, the ministry added.
According to the statement, countries fight concealment to enhance their economic growth, reduce unfair competition, and facilitate investment and employment opportunities for their citizens.
Correcting the situation is done through several options, the ministry said.
• The first is through introducing a new partner and continuing with the facility.
• The second is through disposing of the facility by sale or dissolution.
• Another option is obtaining a foreign investment license and obtaining a distinguished residency.
“After the situation is dealt with, the owner will be obligated to resettle the jobs and pay government fees, taxes,” the ministry added.
The statement said that correcting the infringing activities and making foreign investment available is a global commercial practice that contributes to developing the business environment and creating jobs.
The Ministry of Commerce’s statement concluded that this would contribute to the “stability, expansion, and growth of businesses, enhances transparency, and maximizes enterprises’ responsibility to serve the national economy.”
In August 2020, Saudi Arabia’s Ministry of Commerce confirmed the Kingdom’s new anti-concealment law that includes heavy penalties of jail time and fines, as well as the protection of whistleblowers.
Following cabinet approval, the new law stipulates up to five years in jail and fines of 5 million Saudi riyals for those who break the new law.
The law, which was initially passed by the Kingdom’s Shura Council earlier last month, was created to “contribute to restricting the sources of concealment and eliminating the shadow economy,” according to the Ministry of Commerce.