Saudi Arabia to impose 5 percent VAT on gasoline from 2018

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The Saudi General Authority for Zakat and Income (GAZI) said the government will impose a 5% Value Added Tax on gasoline as of January 2018.

GAZI made this announcement via Twitter in response to a Saudi citizen’s question.

The authority has recently said VAT will be imposed on local transportation services and administrative services at banks, adding that services which will be exempted include international transportation, goods that are exported outside Gulf Cooperation Council territory and the list of medicines and medical equipment issued by the health ministry and by the food and drug authority.

Selling or renting a personal residential property used by the owner or by his close relative will also be exempted from VAT.

GAZI is geared to sign a cooperation deal with the Ministry of Municipal and Rural Affairs following similar agreements with the Ministry of Labor and Social Development and the Customs Department in the context of its preparations to enforce the VAT on Janaury 1, 2018.

Meanwhile, the governor of GAZI, Suhail Abanami, said the authority seeks to sign these deals to encourage government agencies to register and achieve the required preparedness before the launch of the VAT system, and provide all means of support and quality services in this regard.


Government agencies have many steps to undertake in preparation for the application of the VAT system and, therefore, GAZI exerts its best to support agencies and upgrade their efficiency, he said.

The GAZI governor urged qualified government establishments, whose annual revenues exceed SR1,000,000 ($266,649), to register for the VAT system before Dec. 20, 2017 through the website

For his part, the spokesman for the Ministry of Municipal and Rural Affairs, Hamad Al-Omar, lauded the efforts being exerted by the authority to ensure the application of the VAT system, adding that they were working smoothly with GAZI to serve the national interests.

(With inputs from the Saudi Gazette)

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