Lower VAT threshold to increase taxpayer base in Saudi: KPMG

The reduction in the value-added tax (VAT) registration threshold to SAR 375,000 from January 1 is set to increase the taxpayer base by 150,000, according to KPMG Al Fozan & Partners.

The Kingdom introduced VAT on January 1, 2018, and currently has over 140,000 VAT-registered taxpayers.

"The relative efficiency with which the General Authority for Zakat and Tax (GAZT) managed the implementation played a significant part in the fairly uneventful adoption," Nick Soverall, Head of VAT at KPMG Al Fozan & Partners, said in a statement.

Since non-resident taxpayers face some challenges in appointing a tax representative to act on their behalf and to assume joint liability for VAT debts, KPMG said it expects progress to be made soon on this issue.

Soverall called upon business to consider creating a tax strategy, including policies and procedures, to manage tax risk and interaction with stakeholders, suggesting the need to use tax technology to aid compliance and analysis.

"Managing large volumes of data present a financial and tax risk. Therefore, the integration of tax specific technology to optimize tax operations is critical," he added.