Taxes or tariffs on imports in Saudi Arabia Essay

Taxes or tariffs on imports in Saudi Arabia - Essay ExampleHowever, Saudi Arabia imposes 5 percent transaction of tradition upon majority of imports that are dutiable. Although 5 percent customs duty is charged on majority of dutiable goods, certain imports attract a higher duty of 12 percent ad valorem on cost, insurance and freight value usually known as C.I.F while other imported commodities are charged 20 percent customs duty so as to protect the national infant industries. Commodities covered by customs duties of 20 percent include Bottles and flasks, Ice cream without cocoa, Chocolates, Chewing gum, Aluminium barrels and cans among others. This is among the governments undertakings to agree growth of industries in this nation of Saudi Arabia. (www.the-saudi.net) Contractors in Saudi Arabia are required to purchase materials and equipments topically but if the materials are not available then they can import from foreign countries at adjust to 4 percent tariff evaluate. T obacco is charged the highest rate duty of 1 percent. This high duty is meant for discouraging its smoking and other ways of consumption in the nation since it is harmful to humans. It is therefore distinct that the government of Saudi Arabia has, to a great extent, used tariffs and taxes on imports as a control beak in the country. In addition to the above taxes, 5 percent common external tariff which was launch by the gulf cooperation council (GCC) forms part of tariffs charged in Saudi Arabia. GCC is formed by six states in membership which are Bahrain, Saudi Arabia, Kuwait, United Arab Emirates, Oman and Qatar. All imports coming from GCCs states are usually let off from any duties. Originality of these goods requires that 40 percent of value be added internally. In addition, special concessions are given to members of the Arab unify since they are happen to be signatories to the agreement that is meant to facilitate trade as well as put back and also to organize transit o f commodities between the Arab league states. Further duty reductions are given on commodity imports from the Arab states which lose entered bilateral agreements with this nation of Saudi Arabia. It is worth noting that only a few items have their customs duties calculated based on metric weight and capacity as opposed to ad valorem. However, the rates for such limited commodities are relatively low. (www.cgijeddah.com) SYSTEM USED The Harmonized Commodity explanation and Coding System (HS) of the international Brussels agreement of 14 June 1983 have been in use in Saudi Arabia since 1991. This system came into being after authorization by the Royal Decree Number M/56 and that is dated 19/10/1407 H., and it was ordered to be put into function by the diplomatic minister for Finance and national Economy in Order No. 3/1805 dated 19/10/1410 H. This is the main system used by the customs department of Saudi Arabia In determining the rates of taxes applicable to different imported com modities. It gives provisions of classification for entirely every commodity that has a perchance of being imported. (www.the-saudi.net) SAUDI ARABIAS ECONOMY. Saudi Arabia, being an oil rich kingdom has one of the virtually vibrant economies in the Gulf region. Buoyed by clear focus on economic diversification and take down oil prices, the kingdom of Saudi represents exciting