What You Need To Know About The New Saudi Arabia Customs Duties

Businessby Arnab Dey20 October 2022

Customs Duties

To improve Saudia Arabia’s economic competitiveness, the government has recently implemented a series of reforms to its customs system. The changes are designed to reduce the time and cost associated with importing and exporting goods into and out of the country.

One of the most significant changes is introducing an electronic customs clearance system, replacing the current paper-based system. This will significantly speed up the clearance process and reduce the opportunities for corruption.

Other changes include the streamlining of customs procedures, the simplification of import and export documentation requirements, and the reduction of red tape. These reforms should make it easier for businesses to trade with Saudi Arabia and make the country a more attractive destination for foreign investment.

The new customs duties will come into effect on January 1, 2019, and will be applied to all imports and exports. However, many exemptions and reliefs are available, so it’s important to seek professional advice to ensure you’re compliant with the new rules.

The Saudi Arabia Customs Duties services were established to provide businesses with various solutions for the efficient and prompt collection of customs duties. The service is available to businesses of all sizes, from sole proprietorships to large corporations, and can be used for import and export transactions.

If you trade with Saudi Arabia or are considering starting to do so, contact your local Chambers of Commerce for more information and support.

Providing Customs Duties service Creation BC Customs Duties Services in Saudi Arabia & the GCC region is one of the leading companies providing comprehensive services in this area.

The Saudi government has announced that it will increase customs duties on certain goods imported from the United Arab Emirates (UAE), effective from January 1, 2020.

According to a report by the official Saudi Press Agency (SPA), the decision came after the UAE failed to comply with a World Trade Organization (WTO) ruling that found that it had illegally subsidized its aluminum industry.

The Saudi government says that the increase in customs duties encourages local production and consumption of goods and reduces the country’s reliance on imports. However, many economists believe that the real reason is to generate revenue for the government, which is facing a fiscal deficit due to low oil prices.

Main categories of goods to increase in customs duties:

  • Food and beverages – 100%
  • Clothing and footwear – 50%
  • Electronics and home appliances – 30%
  • Cars and motorcycles – 20%
  • Building materials – 10%

Whatever the reason, the fact is that the new customs duties will make imported goods more expensive, and this is likely to cause inflationary pressures in the Saudi economy. As a result, consumer spending will likely fall as people switch to cheaper alternatives or postpone their purchases. This could lead to job losses in the retail sector and industries that depend on consumer spending, such as advertising and tourism.

The Saudi government has said it will provide financial assistance to low-income families affected by the new customs duties. However, it is unclear how this will be implemented or whether it will be enough to offset the impact of the price increases.

In the long term, the Saudi government’s goal of boosting local production and reducing reliance on imports is laudable. However, in the short term, the new customs duties will likely cause hardship for many consumers in Saudi Arabia.

What Can I Do To Minimize The Impact On My Business?

new customs duties

Understanding the new customs duties will impact your business. If you import goods into Saudi Arabia, you must pay customs duties on those goods. The amount of duty depends on the value of the goods and the type of imported goods. You can learn more about the new customs duties by visiting the website of the Saudi Customs Authority.

It would help if you also considered whether any other taxes or fees would apply to your imports. For example, you may be required to pay VAT on your imports. It would help if you spoke to your accountant or financial advisor to understand better all the taxes and fees that may apply to your business.

Once you clearly understand the new customs duties, you can take steps to minimize the impact on your business. One way to do this is to source your goods from suppliers outside Saudi Arabia. This may help you avoid paying customs duties on your imports.

It would help to consider whether you could ship your goods via a third-party logistics provider (3PL). 3PLs can help you avoid paying customs duties by shipping your goods directly to your Saudi Arabian customers.

Finally, it would help if you spoke to your accountant or financial advisor about how the new customs duties will impact your business and what steps you can take to minimize the impact. They will be able to provide you with expert advice on how to navigate the new customs duties and help you avoid any potential pitfalls.

What Steps Should I Take To Prepare For The New Customs Duties?

  • Speak to your accountant or financial advisor to understand how the new customs duties will impact your business.
  • Sourcing goods from suppliers outside of Saudi Arabia may help you avoid paying customs duties on your imports.
  • You should consider whether you can ship your goods via a third-party logistics provider (3PL). 3PLs can help you avoid paying customs duties by shipping your goods directly to your Saudi Arabian customers.
  • Ensure that your accounting and compliance systems are up to date and can handle the new requirements imposed by customs duties.
  • Review your insurance policies to ensure adequate coverage if your goods are delayed or damaged during shipping.
  • Stay current with the latest customs laws and regulations changes by subscribing to updates from the Saudi Customs Authority.

What Are The Risks Of Not Preparing For The New Customs Duties?

Preparing For The New Customs Duties

You may pay more for customs duties than you need to.

Your goods may be delayed or held up at customs.

You may be required to pay additional taxes or fees on your imports.

You may face penalties if you do not comply with the new customs laws and regulations.

Your business may suffer disruptions if your goods are delayed or damaged during shipping.
In addition, the new customs duties are scheduled to be effective on July 1, 2019. Therefore, you must prepare for the changes to avoid potential disruptions to your business.

The Bottom Line

The new customs duties will impact businesses that import goods into Saudi Arabia. Therefore, understanding how the new duties will impact your business is important, and taking steps to minimize the impact is important.

It would help if you spoke to your accountant or financial advisor to understand the changes and take steps to prepare them. In addition, it will help if you subscribe to updates from the Saudi Customs Authority.

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Arnab Dey

Arnab is a passionate blogger. He is very much passionate about social media. His special interests are in current affairs, business, lifestyle, health, food, fitness, etc. If you want to read refulgent blogs so please follow The Daily Notes.

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