Following the initial customs duty rate rise announcement in the Kingdom of Saudi Arabia (KSA) that was supposed to be implemented on 10 June 2020 and the subsequent postponement of this measure, Saudi Customs have now published a revised (and shorter) list of goods on which the new (and higher) duty rates will apply. The increased duty will come into effect 20 June 2020.
The categories of products to which this duty rate rise applies include, dairy products, foodstuffs, chemical products, plastics, rubber and its derivatives, goods made of straw and paper, textiles and clothing, steel, glass, aluminum, machines and electrical equipment, some vehicles and spare parts, among other goods. The increase in duty rates range from 5.5% - 20% of their dutiable value.
This duty rate increase compounded with the recent Saudi Value Added Tax (VAT) rate rise (from 5% to 15% from 1 July), creates additional cash flow and VAT and duty funding requirement for businesses/organizations that import goods into KSA. In order to understand the implications of the customs duty rate rise on your business, a detailed business impact assessment review, including review of the following factors should be undertaken: