Saudi Arabia imposes 5% VAT on basic goods, OFWs advised to spend wisely

Joniel Monton

International Philippine School in Al-Khobar

The imposition of the government of Saudi Arabia of a five percent Value Added Tax (VAT) will affect the Arab nation’s food and beverage industry, petroleum products, rents of commercial establishments, remittance fee, and domestic transportation, among others.

The VAT already resulted in an increase of almost 55 percent in prices of gasoline.

With this, electricity rates will go up to 300 percent.

Overseas Filipino worker (OFW) Raymond Tolosa is already complaining because of a ten percent rise in school tuition this year. He worries it will further increase next year because of additional taxes.

“It’s better to send my children back to the Philippines because it’s more costly to study here,” he said.

However, Philippine Ambassador to Saudi Arabia Adnan Alonto noted that some Philippine schools in the Arab country might be exempted from the additional taxes if it can prove that they are community schools.

“For schools that have requested for certification, come here at the embassy… we can assure you that we will release a statement saying you are exempted, ” Alonto said.

Exempted from the additional taxes are residential rents, medicines, and medical equipment.

It was in 2016 when the unified agreement for VAT of the cooperation council for the Arab states of the gulf was released. The Arab Emirates, Bahrain, Qatar, Kuwait, Oman and Saudi Arabia are among the Arab countries that signed the agreement.

The VAT is a financial measure of Saudi Arabia, which will become one of its non-oil revenue sources.

According to Ambassador Alonto, with this development, Filipinos based in Saudi Arabia should learn how to properly save money.

“Filipinos here know how to endure. We know how to strive for our families,” said Alonto — Bong Duqueza | UNTV News & Rescue

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