Selected medication, medical equipment and technology will be exempt from Value Added Tax in Saudi Arabia, the Kingdom’s government has confirmed.
Set to be introduced on January 1st 2018, Saudi’s new VAT laws are expected to raise between $7bn and $21bn to boost the Kingdom’s economy annually, as it attempts to cope with the drop in the price and demand for oil.
Saudi Arabia and the UAE are to become the first Gulf states to introduce the new taxation which, at just 5%, is the lowest rate in the world. Fellow GCC members; Kuwait, Bahrain and Oman have also agreed to the introduction of the tax, however won’t bring it in until a later date.
Healthcare tech’ and medication aren’t the only exempt items - with air travel, oil, residential property and educational materials all also free from the additional costs.
What should VAT mean for healthcare in the Gulf overall? Well it should lead to a healthier population (thanks to heavier taxes on unhealthy foods), and greater funding for public hospitals region-wide. That’s certainly a major aim of the plans anyway.
The cost of living is likely to increase slightly, however the changes are unlikely to be deal-breaking for anyone looking for a move.
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