July 25, 2024 Saudi Arabia issues resolution amending customs duties on certain goods
Executive summary On 15 July 2024, Saudi Arabia's Finance Minister and Chairman of the Zakat, Tax and Customs Authority (ZATCA) issued Minister of Finance Resolution No. (1-88-1446) (Resolution), amending the customs duty rates applicable to certain goods, for the purpose of protecting and encouraging national industries and transactions involving local agricultural products. The Resolution was published in the Official Gazette and the amendments entered into force on 16 July 2024. Detailed discussion Background The Resolution was issued in response to a request from the Ministry of Industry and Mineral Resources to raise customs duty rates for certain goods to protect and encourage national industries and transactions involving local agricultural products in Saudi Arabia. Details of the amendments The amendments are consistent with the maximum duty rates to which Saudi Arabia has committed as a member of the World Trade Organization (WTO). The customs duty rates applicable to the three types of electrical products, as indicated in the table below, have been increased from 5% to 15%:
Implications The amendments are anticipated to have significant implications for importers in Saudi Arabia who are involved with the specified goods, potentially influencing market dynamics and trade flows. Domestic producers may benefit from increased protection, potentially leading to greater market share within Saudi Arabia. Businesses in Saudi Arabia, engaged in the import of the specified goods, should review the new customs duty rates and conduct an impact assessment to quantify the financial impact of this increase on their overall supply chain costs.
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