Saudi Arabia Medina shoppers
Shoppers queue up outside a mall in the Saudi city of Medina. Image Credit: SPA

Cairo: Saudi authorities have recorded a total of 1,685 violations of a hike in the value-added (VAT) tax, a week after the increase took effect in the kingdom, the Saudi news agency SPA has reported.

In May, Saudi Arabia announced tripling the VAT from 5 per cent on goods and services as part of measures to mitigate economic fallout from the impact of the new coronavirus and a fall in oil prices.

The increase went into effect on July 1.

Field teams from the Saudi General Authority of Zakat and Tax (GAZT) have since mounted a large-scale inspection campaign nationwide to make sure that businesses comply with the new VAT regulations. Inspections targeted retailers, restaurants and general trade outlets.

Most of the exposed violations were related to failure to collect the tax or charging fees less than the due tax.

The capital Riyadh has topped the list of detected infringements with 201 violations, followed by the Red Sea city of Jeddah with 181 and the Governorate of Al-Ahsa in eastern Saudi Arabia with 155.

The GAZT urged owners of businesses to abide by applying the new VAT value of 15 per cent and vowed to continue inspection of markets and stores to ensure compliance with the kingdom’s tax regulations.

The authority has renewed its call on consumers to report any commercial entity, which does not apply the new VAT percentage, by calling the hotline 19993, logging onto its website that operate from 8am until midnight all days of the week, or using a VAT app on smartphones.