Al-Madina

WE should prepare well for inflation, which has arrived at a time when the government has imposed and enforced fees on the dependents of expatriate workers as well as introduced Value Added Tax (VAT). This new tax will be enforced in a few months’ time. So many things have happened that have led to inflation.

When taxes are imposed, prices automatically increase. Economists call it inflation. Nobody, including economists, can predict the volume of inflation for the simple reason that VAT extends to factories, production units, packaging processes, distribution, merchants and consumers. The effect is immediate and tangible across society.

Starting in the beginning of September, all businesses and corporations are required to register on the website of the General Authority of Zakat and Tax. All private corporations that earn over $100,000 annually will be asked to register. Registration is obligatory.

In other countries, one is issued with a VAT receipt, which can be up to 20 percent. Tourists are also able to reclaim VAT at the airport. The form shows the amount of tax refund that you will be paid, either in cash or through bank transfers.

Similarly, visitors who come to the Kingdom should be given such options. This way we will encourage them to purchase as many goods as they want without having to worry about paying VAT at the airport when returning to their home countries. They will feel assured when they receive a tax refund.