Some Sector in Saudi, Exempted from VAT; Military Personnel to Have Monthly Allowances!

Starting January 1, 2018, five percent Value Added Tax (VAT) is already implemented in the Kingdom of Saudi Arabia, but less than a week after the implementation, King Salman announced that some of its citizens will be exempted from the VAT.

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The Custodian of the Two Holy Mosques announced that the whole government staff and military personnel will receive SR1,000 per month as a cost of living allowance. This allowance will be given for a period of one year. Military personnel serving at Yemen frontline will get a much bigger payment of SR5,000.

Aside from the allowances, Saudi civic and military personnel will be given an annual bonus starting this year. It said that the bonus should be given effective January 1, 2018.

It was Crown Prince Muhammad Bin Salman, deputy premier and minister of defense who recommends for the new allowances.

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King Salman also ordered the state to unify the disbursal of salaries to all government staff.

He also announced that some citizen groups will be receiving an allowance and will be exempted from paying VAT. This includes pensioners that will receive SR500 per month in the span of one year. The allowance will be added to their pension that being distributed by the Public Pension Agency and the General Organization for Social Insurance (GOSI).

Aside from this, King Salman also ordered 10 percent increase in stipend or allowances for Saudi students, both boys, and girls for a year.

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Also under the Royal Decree of the King, a first house bought by a Saudi citizen that will not exceed SR850,000 will be tax-exempted.

Saudi citizens who are beneficiaries of private health and private education services will b also exempted from tax. It said that the state will be the one to shoulder the tax of the above-mentioned people.

Therefore this few sector of citizens in Saudi Arabia will still enjoy the tax-free living for a while. Saudi Arabia imposes a five percent of VAT to almost all goods and services to generate income to counter the effect of decreasing oil prices.

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10 REASONS HOW AN OFW IN THE MIDDLE EAST IS AFFECTED BY THE LOW OIL PRICES

10 REASONS HOW AN OFW GETS AFFECTED BY THE LOW OIL PRICES IN THE MIDDLE EAST. 
The domino effect of the continued decline of oil prices in the market has an effect to the overseas Filipinos.











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WATCH: DTI Pushing To Lower Prices of Goods But Businessmen Resisting The Price Cut

The Department of Trade and Industry or DTI is pushing for rollback in prices of goods and services because of the continued decline in the  price of crude oil in the world market. It can be noted that there had been series of rollback in the price of fuel.

 However the Federation of Philippine Industries which consist of many businessmen are resisting for the said rollback saying the shipping and trucking costs  have yet to decline first. But the DTI said the total cost should have gone down even if transport cost remain at the same level.

  The agency also plans to coordinate with the Agriculture Department since prices of fish, pork, poultry and other fresh produce should also be reduced with the fuel prices cuts. 

They will also convene with the National Price Coordinating Council to discuss the cut in prices of goods and commodities.  It is also expected that retailers would cut on the fuel prices this week as crude prices continue to drop in the world market.  

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Why Is Saudi Binladin Group Laying-off 15,000 workers?

The Saudi Binladin Group is one of the biggest construction companies in the Middle East. After the tragic accident in Makkah last September 11 the King of Saudi Arabia gave sanction in which  the company can no longer receive projects.

The company right now is planning to cut 15,000 staff.  But based on the Linkedin information of the company, the lay-off number is nothing but a small percentage of Saudi Binladin's total workforce of 200,000.

The cut-back however is not solely a result of the sanction but also a result of pressure in many industries in the Middle East due to the low oil price.

A source, which ArabianBusiness.com chose not to be named due to sensitivity of the matter also said, that these 15,000 employees will be laid-off immediately while others will be transferred to work on a project in Jeddah Airport.

The biggest challenge Saudi Binladin Group as well as other construction companies are facing would be the spending curb of the Saudi government due to low oil price. Many government projects will be delayed and some projects will be cancelled. Government bodies are also demanding to cut cost from some of its contractors.

Information Source: Arabianbusiness.com

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