The new rules, to be implemented early 2020, introduce a number of changes, including improving Zakat collection procedures to achieve the highest degree of commitment and efficiency and increase transparency
Saudi Arabia’s General Authority of Zakat and Tax (the Authority) on Friday announced the issuance of implementing regulations for the collection of Zakat, along with other resolutions, all of which go into effect early next year and aim to improve collection procedures and enhance transparency.
“The General Authority of Zakat and Tax, following a number of regulatory amendments, announced the Minister of Finance and the Chairman of the Board of Directors’ decisions to issue the Zakat collection regulations, the Zakat calculation rules for financing activities, the government’s assumption of responsibility of the Zakat and income tax on investment in government bonds and sukuk,” the Authority, which is under the Ministry of Finance, said in a statement.
This came as part of the Authority’s commitment to continuous improvement, which enhances transparency between the Authority and the taxpayers and achieves the highest degrees of efficiency and disclosure. These regulations and related decisions will be implemented in early 2020.
“The implementing regulations for the collection of Zakat have introduced a number of changes, the most important of which is the improvement in Zakat collection procedures to achieve the highest degree of commitment and efficiency and increase transparency,” the Authority said. “This will help in attracting investment and increasing investor confidence.”
One of the changes that will have a positive impact is the Zakat treatment of properties under development which will support the real estate development industry and encourage investment in it.
The implementing regulations also clearly defined the criteria of the Zakat components for insurance activities, considering the special nature of the business.
The Zakat calculation for the financing activities has been updated and improved to raise the level of commitment and reduce disputes that may arise between the Authority and the taxpayers.
To encourage the development of the local debt market and the investment in government issued debt instrument, the government will assume the Zakat liability on such instruments.
The General Authority of Zakat and Tax will begin working on the development of manuals to detail, explain and clarify the provisions of the regulation and answer taxpayers’ queries.