Smart Alert LPA Middle East | Increase in custom duty rates in Kingdom of Saudi Arabia (KSA) |
Smart Alert LPA Middle East | Increase in custom duty rates in Kingdom of Saudi Arabia (KSA)
On 26 May 2020, the General Authority of Saudi Customs announced an increase in custom duty rates on a wide range of goods, starting from the 10 June 2020. The full list of goods as detailed here to, includes in particular food, textile, mineral and chemical products, base metals (e.g. steel, iron, nickel, copper, aluminium), machinery and equipment, vehicles, and various other manufactured goods and building materials.
The rate increases range from 0.5% to 15% depending on the products. The rise in custom duties will represent an increase in costs for importers, manufacturers and the rest of the supply chain, causing a direct impact on profitability.
The increased/new custom duty rates will apply to all the goods listed imported to the Kingdom from all countries. However, under two treaties named as (i) the Agreement to Facilitate and Develop Inter Arab Trade and its Executive Program and the (ii) Economic Agreement between GCC State, goods imported from these countries benefit from reduced custom duty rates in KSA while other goods are exempted altogether.
These treaties will continue to apply after the new law come into force on June, 10 and, therefore it is recommended that businesses importing into the KSA review their current product list to determine whether the goods will be exempted under the treaties and evaluate the overall impact on their supply chain.
With custom duty rates of up to 30% for certain imported goods, it is critical for businesses to review their trading and customs policies to ensure they remain efficient and take advantage of available exemptions or alternative trading solutions, in particular within the supply chain to determine who will be bearing the additional costs.
How can LPA Middle East help?
It is recommended that businesses consider reviewing their customs and international trade policies in compliance with applicable customs rules and regulations in KSA. LPA Middle East can advise businesses on the impact of duties increase and identify options to minimize its effects.
For more information on how this might affect your business, please do not hesitate to contact us.