STRATEGIES FOR DEVELOPING VALUE ADDED TAX IN SAUDI ARABIA Case Solution
ABSTRACT
The conducted research efficiently analyses the impacts that can be experienced by Saudi Arabia after the implementation of Value added taxing system (VAT) in the region. The report provides an overview regarding the influences caused by the current taxation system of the country and how it has been affecting the growth of the country with respect to their economic and societal development and how it can be enhanced with the help of implementing a value added taxation system. The report provides an overview regarding the changes that can be caused with a changed taxation policy, what could be the best possible means of taxation for the country and how the changed taxation policy can sufficiently be carried out across business and economic operations of the country.
INTRODUCTION
In the prior years, a number of significant changes have taken place in the economic policies of the Gulf Corporation Council (GCC) cause majorly by the long-term decline in the real oil prices. The countries in the region have had to accommodate with volatility due to the recent decrease in the oil prices. Followed by the sharp increase in the prices across the globe, authorities in the region have focused in recycling the windfall oil gains with the support of generous welfare systems and inclined attention of the general public towards investing their income in the development of the infrastructure, utilities and the most basic industries which have resulted in leading the country towards rapid growth in the activities that do not involve oil as commodity. Controlling authorities have also supported and encouraged the developmental activities by providing and working upon the fiscal incentives. In comparison with the GCC countries, the oil wealth has benefited Saudi Arabia highly as it has supported rapid economic development in the region (Chemingui). The economic development in the region has accelerated significantly and has resulted in transforming the whole picture of the territory. Due to experiencing sharp rise in the revenues generated by the petroleum industry of the country, the country has become a contender for the fastest growing economies in the world as it has been enjoying substantial surplus in the overall involvement in trade operations with a number of countries. The Kingdom of Saudi Arabia has experienced a drastic increase in the imports, which have increased the availability of funds for government to be invested in the developmental activities.
However, the company faced difficulties in controlling their economic conditions as the global demands for oil decreased, which resulted in decreasing the Saudi oil production and affected the economic conditions of the country. Due to the decreased demands globally with respect to oil, budgetary deficits have developed in the country and the government has been drawn towards adopting changed taxation policies for prevailing healthy economic conditions in the Kingdom of Saudi Arabia (Hertog).
VALUE ADDED TAXATION BODY
Governing authorities of the country can effectively implement the taxation system with the help of acquiring support from the tax regulating authorities. The tax regulation and imposing authorities can regulate the operating entities in the country with the newly adopted taxations system in order to carry out the system across the economic factors. The government should review the taxation regulatory body that is responsible for tax collection of the Kingdom of Saudi Arabia. Moreover, the government should focus on developing a team of individuals who have efficiency over the taxation policies and have been involved in the value added taxation system previously (PWC). A group of individuals acquiring a set of expertise related to the VAT would play a supporting role in the implementation of the system across the country while maintaining communication and coordination with the central bank of the country...................
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