The Ministry of Labor and Social Development (MLSD) deposited the second installment of SR 2.1 billion into the Kingdom’s household allowance program, informed Citizen’s Account program director Ali Rajhi.
Known as the Citizens Account, the initiative is designed to provide financial assistance to low- and middle-income Saudi families and to support them from the direct and indirect impact of energy price hike as well as Value Added Tax (VAT) implementation.
In the second round of its payment, each family received an average amount of SR 935. Citizens Account supports some 11 million beneficiaries of which 3 million are independent families and 7.9 million are heads of households.
50 percent of the independent families and individuals received full payment, while 26 percent of the applicants received partial financial support.
Earlier on December 21, 2017, the first installment of the Citizen’s Account of around SR 2 billion was transferred to 10.6 million beneficiaries.
More than SR 4 billion has been deposited in the beneficiary accounts in the first and second rounds of Citizens Accounts program, Al-Rajhi noted.
Payments are usually deposited on the 10th of every month. However, if the 10th falls on a Friday, then the cash will be deposited on Thursday, and if it falls on Saturday, then the amount will be deposited to beneficiary accounts on Sunday.
The next monthly installment will be transferred on February 10th to applicants who have completed their application before January 10, 2018.
The Saudi Commission for Tourism and National Heritage (SCTH) announced that women over 25 years of age will be granted tourist visa to travel to Saudi Arabia provided that she is part of a tourist group. However, it is mandatory for women under 25 to be accompanied by a family member.
Tourism agencies arranging visits to Saudi Arabia must be licensed by the pertinent authority of its country. Tour operators in the Kingdom must be licensed by SCTH and are responsible to receive tourists, supervise their stay and departure, provide at least one tour guide from the Kingdom who speaks the language of the tourists and educate tourists about the Saudi traditions and laws prior to their arrival. Tourists visiting the Kingdom are advised to respect the Saudi traditions, laws and customs.
Moreover, if a tourism agency cancels a tour or leaves behind more than 100 people after their visas have been issued, then such agencies will be reported to the ministry of interior and foreign affairs and will be banned from organizing tourism packages to the Kingdom.
Tourist visas issued by the Kingdom will be single-entry visa with a validity of 30 days and it will be independent of work, visit, Hajj and Umrah visas, said Omar Al-Mubarak, director general of SCTH’s licensing department. He added that executive regulations for tourist visas have been finalized and the commission’s IT department is currently developing an electronic system for the issuance of tourist visas, in coordination with the representatives of National Information Center and Foreign Ministry.
With the growth of its tourism sector, Kingdom aims to create more job opportunities and diversify its revenue beyond oil and thereby contribute to Saudi Arabia’s dream program Vision 2030.
The General Authority of Zakat and Tax (GAZT) announced that all lease-to-own and rent-to-own (Ijara) contracts of assets like real estate or cars concluded before January 1, 2018 will not be liable to pay Value Added Tax (VAT).
GAZT clarified that such contracts are viewed as non-continuous supplies and therefore VAT will not be collected for these contracts on the remaining installments after January 1, 2018. However, those signed after January 1, 2018 will be subject to the standard 5 percent VAT.
The GCC unified agreement for VAT, the VAT law and implementing regulations specifies that tax must be imposed only on the value of the underlying assets and any profit or benefit gained from the contract will be exempted from VAT.
According to the implementing regulations of VAT, several activities in the financial sector like interest on loans or lending fees charged with an implicit profit margin, including loans and credit cards, mortgages, finance leases, banknotes or financial security transactions, current accounts, deposit and savings account are exempted from VAT.
In a related note, Saudi Food and Drug Authority (FDA) informed that human medicines, vitamins, and registered medical devices and products will be free from VAT. Abdul Rahman Al-Sultan, director of SFDA’s department of pharmaceutical information and awareness, urged consumers to inform GAZT on 19993 or through “VAT” application any establishment that does not adhere to the VAT policy. The details of medicines and medical products exempted from VAT are available at https://www.sfda.gov.sa/ar/drug/search/Pages/default.aspx and the list of medical devices excluded from VAT is available at https://mdma.sfda.gov.sa/ListedProducts.aspx.
The General Authority of Statistics (GaStat) Q3 labor report indicated a drop of 5.8 percent in the Kingdom’s overall unemployment rate among Saudis during the third quarter of 2017 in comparison to the second quarter. Although there has been an increase in the number of new jobseekers in the Saudi market, the Kingdom’s unemployment rate remained stable at 12.8 percent. Saudi Arabia now stands 12th among G20 countries in terms of average drop in the rate of unemployment.
The report also indicated that 54.8 percent of the populations are engaged in some sort of economic activities, of which 78.4 percent are males and 19.9 percent are females. Reforms and programmes undertaken by the Council of Economic and Development Affairs (CEDA) to empower uplift and support Saudi women to take up jobs succeeded in lowering the unemployment rate among Saudi women to 21.1 percent in third quarter from 22.9 percent in the second quarter.
During the third quarter, there were 1,231,549 unemployed Saudis of which 1,040,727 were women and 190,822 were men.31.3 percent of the overall jobseekers belonged to the highly productive age group of 25-29 years and interestingly, 45.8 percent of the job hunters were university degree holders.
Meanwhile, the GaStat analysis of the third quarter of 2017 indicated that 94,390 foreign employees opted to leave the Kingdom in Q3 of 2017, largely due to Saudization in several job sectors and an exceptional increase in living cost. The number of expats working in the Kingdom’s public and private sector was around 10.79 million in Q2 which reduced to 10.6 million in Q3.
The number of visas issued during the third quarter of 2017 totalled 509,180 with 22.3 percent visas issued in the public sector and 39.9 percent in the private sector. Around 37.8 percent visas were issued to recruit domestic employees.
Saudi Arabia announced plans to grant tourist visas for visitors from 65 nations under the Saudi Arabia Muslims’ Destination initiative. The initiative, launched by Saudi Commission for Tourism and National Heritage (SCTH) is another vision of Kingdom’s National Transformation Program 2020.
Being the cradle of Islam and a major destination for Muslims, Saudi Arabia, through this initiative targets pilgrims and visitors, Muslim business visitors, government guests and Muslim transit passengers. In the initial stage of its implementation, visitors from 65 countries can obtain tourist visa to Saudi Arabia through travel agency packages, quoted Mohammed A.Al-Amri, General Manager of SCTH in Makkah region.
At present, a total of 13 historic places and 10 museums have been chosen by the commission to be part of the tourism package. The program will allow pilgrims to extend their Umrah packages as well. Last year, out of 6.7 million pilgrims who arrived at the holy city of Makkah and Madinah, around 3000 pilgrims extended their stay in the Kingdom and this number is expected to increase this year as more tourism companies and Umrah establishments will complete their registration soon.
Through the initiative, the Kingdom aims to serve pilgrims and visitors and thereby achieve the goal of Vision 2030 to increase the number of pilgrims, enhance private sector contribution to tourism, cooperate with the public sector to develop infrastructure and highlight the historic heritage of the Kingdom, said Khalid Tahir, director of Saudi Arabia Muslims’ Destination initiative.
Saudi Arabia raised fuel prices with effect from January 1, 2018. The initiative is part of a program that aims at gradually eliminating energy subsidies as the Kingdom seeks to overhaul its economy and balance the budget. The price of Octane 91 increased from 0.75 riyals to 1.37 riyals per liter while that of Octane 95 increased from 0.90 riyals to 2.04 riyals per liter.
The rate of diesel for transportation purpose will remain unchanged at 0.47 riyals per liter. Kerosene prices will also remain unchanged at 0.64 riyals per liter.
Diesel for industries and utilities will now be available at 0.378 riyals. The prices are inclusive of Value Added Tax (VAT).
Global tech giants Apple Inc. and Amazon.com are engaged in licensing discussions with Saudi Arabia as part of Crown Prince Muhammed bin Salman’s move to give the Kingdom a high-tech look.
SAGIA, Saudi Arabia’s foreign investment authority, is expected to complete licensing agreement with Apple in February and Apple targets to open its first retail store in the Kingdom in 2019. According to market researcher Euromonitor, Apple is currently the second most sought after mobile brand in the Saudi markets after Samsung.
Amazon’s discussions, which are being carried out by Amazon Web Services (AWS), the company’s cloud computing division is at an earlier stage than Apple and no specific date has been announced for its investment plans. Earlier this year, Amazon acquired Dubai-based online retailer Souq.com, and since then Amazon gained permission to sell its retail goods in the Kingdom. Though both Apple and Amazon have not established their direct presence in Saudi Arabia, they have been selling their products in the Saudi markets via third parties.
Over the past year, Saudi Arabia has been streamlining several of its overlapping laws that could apply to cloud computing to attract service providers.
Since then, Kingdom has entered into a $45 billion technology investment fund with Japan’s Softbank Group and announced $500 billion mega investment city with more robots than humans.
The Saudi Real Estate Refinance Company (SRC) has signed a strategic deal of SR1 billion with Bidiya Home Finance to purchase a portfolio and provide mortgage refinancing facility. This is the second strategic deal signed by SRC in two weeks. Earlier, SRC entered into another refinancing partnership of SR1 billion with prominent real estate financing company, Deutsche Gulf Finance (DGF). The deal will support Bidiya Home Finance to offer more accessible home financing solutions and increase home ownership among Saudis, said Majed AL-Hogail, Saudi Minister of Housing.
One of the goals of Vision 2030 in the housing and real estate sector is to increase the rate of home ownership from 47 to 52 percent in 2020, by providing easily accessible housing finance solutions that will directly facilitate home buyers and boost market growth. The collaboration with Bidiya Home Finance will be another landmark deal which would contribute to the realization of Vision 2030.
SRC, owned solely by Public Investment Fund (PIF), was established in October this year to create a secondary home finance market in Saudi Arabia by increasing liquidity in the Saudi mortgage market.
The General Authority of Zakat and Tax (GAZT) announced that tourists and Hajj and Umrah pilgrims from non-Gulf Cooperation Council (GCC) countries will be provided with a refund of Value Added Tax (VAT) amount they paid on purchases made in the Kingdom. However, GAZT is still working on the mechanism to reimburse VAT to tourists and pilgrims, said Hamoud Al-Harbi, director of VAT operations at GAZT. The process, mechanism, rules and payment modes are yet to be established and will not be implemented in the early months of 2018, he added. In addition to providing the required proof of VAT payment made on products and services, pilgrims and tourists arriving from non-GCC countries should also submit an application to obtain VAT reimbursement.
GAZT is also studying the prospect of opening reimbursement offices at airports and land borders with countries other than GCC nations. Harbi further clarified that pilgrims and tourists who live in the GCC countries will not be exempted from VAT. The implementation of 5 percent VAT in Saudi Arabia is to take effect from January 1, 2018 and more than 83,000 companies in the Kingdom have registered to VAT.