This follows last week’s reports that the tax authority seeks to raise Zakat, potentially bringing it in line with the 20 per cent rate paid by foreign banks in the Kingdom.
Monday 11, March 2019 BY KUDAKWASHE MUZORIWA
Saudi Arabia’s General Authority of Zakat and Tax said that that there are no current plans to increase the Zakat levels in the private sector.
In a statement, the tax authority said that it has commenced public consultation with respect to the draft Zakat Regulations after making some amendments to the content of the regulation according to the authority's jurisdiction.
Saudi-based lenders started paying Zakat at 10 per cent of profit after deducting returns on government bonds from last year as part of a settlement with the authority, they used to pay at 2.5 per cent of equity and the new rate was applied retrospectively for many years, in some cases stretching as far back as 2002.
The Kingdom banking landscape is changing with lenders exploring mergers, National Commercial Bank, in December announced the start of merger talks with Riyad Bank.
The potential deal follows the tie-up between HSBC Holdings affiliate Saudi British Bank and Alawwal, which was backed by Royal Bank of Scotland Group.