Al-Madina newspaper

SINCE the past week, I have been conducting a verbal survey related to the Value Added Tax (VAT) which became effective from Jan. 1, 2018. My simple goal is to test the people’s knowledge in taxes as it is happening for the very first time in the Kingdom.

A majority of people did not know anything about VAT except that there will be a 5% increase in the prices of commodities. How? Why? None of them had enough knowledge. Only a minority were, to an extent, aware of this new VAT. The disaster, however, is that their information was somehow mixed and unauthentic. Not only that but also from unknown sources.

For the Kingdom, applying VAT is totally new to the people since we never had taxes before. Therefore, I believe that there should have been an awareness campaign carried out by the responsible agencies to define taxes and their role in supporting the country’s projects. They should have delivered the message of the taxes accurately to the citizens, society and traders.

To pay taxes is actually patriotic since the collected revenue supports the country’s budget as a whole and its projects. In addition, the amount helps better the other service provided to citizens and expatriates.

It is very important though for all the people to truly understand taxes and their effect. That way, people will know almost everything and avoid fraud or misconceptions.

Some companies took advantage of the people’s ignorance and raised taxes more than the actual 5%. Some of them increased the taxes to a whole Saudi riyal although the actual taxes do not exceed 10 to 20 halalas. Other companies enforced taxes on some services that are not even included in the VAT list of the government. All of that could have been avoided if the citizens were actually aware of it.

The unaware citizen is an attractive target for those looking for fraud and deception.