The Saudi government support to mitigate Coronavirus impact on the economy with a package of SAR.120bn
As an extension of the Saudi government efforts in connection with combating the unprecedented effects and consequences of the coronavirus (COVID-19), the government has announced an urgent financial stimulus package of SAR.120bn to the private sector and the economic activities who are most affected by the virus.
The financial stimulus package included number of initiatives, one of which has reached SAR 70 bn, which consisted of exemptions and postponement of some the government dues, in order to provide liquidity to the private sector and thereby enabling it to continue its businesses safely as much as possible by reducing the pressure on the cashflow.
This initiative is in addition, to a previous financial stimulus package that was announced earlier by Saudi Arabian Monetary Authority (SAMA) totaling SAR 50 bn.
Such financial stimulus package is geared to support the banking sector, financial institutions to provide financial support to SMEs in a forum of deferring payments of banks’ and financial institutions’ dues up to six months, providing concessional financing, enabling banks and insurance companies to relieve SMEs from the financing costs of KAFALA program and support the fees of Point of Sales (PoS) and e-commerce transactions.
It is worth noting that part of the SAR. 70 bn stimulus package includes but not limited to exemption from expat levy for those whose Iqama has expired from now until 30 June 2020, by extending their Iqama for a period of three months without charge.
Also, enabling employers to refund the fees of issued work visas that were not used during the ban on entry and exit, even if they were stamped in the passport, or extend them for a period of three months without charge.
Moreover, enabling employers to extend exit and re-entry visas that were not used during the ban on entry and exit from the Kingdom for a period of three months without charge. And finally, enabling business owners, for a period of three months, to postpone the payment of value-added tax, excise tax, income tax, and the submission of Zakat declarations and the payment of obligations due therefrom.
The Zakat concession also allows to grant zakat certificates without restrictions for the period of fiscal year 2019, and to accept instalment requests to the General Authority of Zakat and Income Tax (GAZIT) without applying the condition of advance payment.
In addition, postponing the execution of services suspension procedures and financial seizure by the GAZIT, and setting the necessary criteria to extend the postponement period for the most affected activities.
Undoubtedly, that such financial stimulus and other government’s initiatives will enhance the stability of the financial sector, the continuity of businesses and guarantee the solidarity of the national economy.