Saudi Arabia considers exempting healthcare, private education from VAT

The Saudi government is studying the possibility of exempting healthcare services and private education from value-added tax (VAT), Finance Minister, Mohammed Al-Jadaan, told Saudi TV on Wednesday.

The Kingdom is also discussing a proposal to exempt citizens buying homes for the first time from the levy, and a final decision will be taken soon, he said without giving further details.

Al-Jadaan ruled out plans for VAT increase. 

Speaking about public servants' bonuses, the finance minister said the civil service ministry will apply a new restructuring system for the public sector to reward high-performing employees.

There are no plans to the revise minimum wage level, however, a study is being conducted to enhance efficiency of the public sector.

Saudi Arabia will continue to pay public servants’ salaries and bonuses in the Gregorian calendar.

Al-Jadaan argued that an unchanged unemployment rate among Saudis in Q3 asserts local economy's capability to absorb new entrants to the labor market, describing this as positive.

The government and the Council of Economic Affairs and Development seek to lower unemployment to the international average level.

Meanwhile, Al-Jadaan added that transport allowances for state employees will see no changes, as civil servants receive support from the Citizen’s Account.

The government is reviewing various projects with a view to shelving or restructuring them. The efficiency bureau had saved the Kingdom SAR 50 billion in 2017.

“The government is very keen on citizens’ interest. Economic reforms are necessary and will be positive for the Kingdom,” Al-Jadaan said.