RIYADH: It is hoped that the levying of a value-added tax (VAT) from Monday will power the Kingdom’s march toward progress and prosperity.
The tax is imposed by Saudi Arabia and the UAE within the framework of a unified agreement endorsed by the member states of the Gulf Cooperation Council (GCC).
“The imposition of VAT will help to raise tax revenues of the Saudi government to be utilized for infrastructure and developmental works,” said Mohammed Al-Khunaizi, a member of the Shoura Council, here on Sunday, while calling VAT “a major move that will contribute to address challenges and sustain growth.” While referring to the compliance of Saudi businesses with VAT regulations, he pointed out that VAT or sales taxes are key revenue sources for more than 166 countries across the world today.
Al-Khunaizi also called for “punitive measures” to be adopted strictly for those who have not registered so far, or who violate the laws. The Ministry of Commerce and Investment has announced that in cooperation with the General Authority for Zakat and Tax (GAZT), it will intensify inspection tours in markets and commercial firms across the Kingdom to track down irregularities before
and during application of the VAT.
“The inspection tours will be directly supervised by the joint operation room for protection of consumers, which was approved by the Council of Ministers and composed of 18 government agencies,” said a ministry statement.
Asked about the preparedness of the retail sector in general, Shehim Mohammed, director of operations of a leading chain of supermarkets in Saudi Arabia, said that the retail outlets have “geared themselves well to comply with VAT regulations…”
Asked about the plan to educate customers at stores about VAT, he pointed out that bills will display VAT charges at their stores. Moreover, VAT will be a great revenue stream for the government, and it will streamline product flow in a positive manner, he observed. “It will tweak customer buying habits pragmatically, though it will force the market movement in the right direction.”
On the introduction of the VAT, Vikas Panchal, a business executive, said: “VAT is a significant milestone in the history of the GCC and is all set to be a major boost for the economy... We understand that the change will be challenging to begin with, more specifically for businesses.”
Saudi Arabia steps into a new era with VAT
Saudi Arabia steps into a new era with VAT
Leading AI company to partner with Saudi Arabia, CEO tells Arab News
- Argentum’s Andrew Sobko: ‘Very easy’ to build new infrastructure, data centers in Kingdom
- In 2024, Saudi Arabia announced $100bn plan to establish AI hub
CHICAGO: The founder and CEO of Argentum AI, one of the world’s leading artificial intelligence companies, has told Arab News that he is looking forward to partnering with Saudi Arabia.
Ukrainian-born Andrew Sobko, based in Chicago, said Crown Prince Mohammed bin Salman has made a significant commitment to AI use.
In 2024, Saudi Arabia announced a $100 billion plan under Vision 2030 to build a hub to develop technology and data centers to handle a significant portion of the world’s AI workload.
The Kingdom reportedly expects AI to contribute more than $135.2 billion to its gross domestic product by 2030, representing roughly 12.4 percent of its economy.
“The US still is the kind of core leader of this AI innovation, development and infrastructure, but we quickly realized that Saudi Arabia sees this as an important asset class, not just as an innovation,” Sobko said.
“They’re deploying tons of capital. If you try to build some new infrastructure or data center, it’s very easy to do it in Saudi Arabia,” he added. “Saudi Arabia realizes and sees this compute as almost like a second asset class after oil.”
The term “compute” refers to the process of calculations that fuels AI development and applications in everyday use.
“The Middle East wants to be one of the largest exporters of compute. They realized that a couple of years ago and they’re aggressively expanding,” Sobko said, adding that AI is being used more and more in industries such as sports, in which Saudi Arabia has invested heavily.
Argentum AI recently added Majed Al-Sorour, CEO of the Saudi Golf Federation, to its board.
“Majed is also a huge believer in AI and AI infrastructure,” said Sobko. “With the help of Majed, we’re focusing on global expansion. He’s leading charge on that.”
Sobko said the challenge is not simply recognizing the importance of AI, but the ability to power data centers that it requires, and Saudi Arabia recognizes that need.
“If you secure a significant amount of power and you have data center capacity, you can actually control this kind of compute and AI,” he added.
“And the biggest bottleneck to continue expanding as we enter into this new age of robotics industry, it needs a lot more compute.”
Following meetings with US leadership, including President Donald Trump last November, Saudi Arabia secured agreements on AI technology transfers, aiming to avoid reliance on other nations’ systems.
