Increase In Saudi Customs Duty Fee – Impact on Business

The increase in the customs duty rates in the Kingdom of Saudi Arabia was announced in May 2020, and has come into effect starting June 10, 2020. This increase in the customs duty fee will be levied on a wide range of goods, including agricultural, industrial and consumer goods.

Increase in Customs Duty Fee – Saudi Arabia

Post Covid-19 lockdown, Saudi Arabia announced a three time increase in its VAT, from 5% to 15%, and a big increase in the Customs Duty rates as well, the increase from 5% to 10%, 15% and even 20% of some goods. This may be a step towards reducing the country’s dependency on its oil income and increasing its non-oil income. This increase would encourage the growth of local industries such as manufacturing, agriculture, etc. in the country and a certain decrease in widely available imported products.

The increase in the duty rates will be applicable to a 74-page list of imported products, as declared by the Saudi customs authority. The entire list of products with their HS codes can be viewed on this link – Also, here’s a list of some of the  products that will see the change in customs duty:

 Product Previous Rate New Rate
 Foods and Beverages 0 – 5% 7% – 25%
 Metal Products 5% upto 20%
 Mineral Products 5% 15%
 Textile Fabrics and Clothing 5% 10%-15%
 Building materials 5% – 12% Upto 15%
 Machinery, equipment and parts 5% – 12% Upto 15%
 Motor vehicles and spare parts 5% Upto 15%
 Chemicals 5% 5.5% – 6.5%
 Plastics and rubber items 5% 5.5% – 6.5%

How Will This Change Impact Businesses?

The increase in Saudi Customs duty fee will not only impact businesses but individuals as well. The increase in the rates will also lead to an increase in the price of the products, making many customers turn to local products.

An increase in customs duty fees will impact the operations of the companies and of all those in involved in the supply chain operations, like manufacturers, importers, retailers, etc.; not just that, this will also impact a business’ profitability aspects. It is, therefore, crucial for businesses to review their international trade and customs policy for finding ways to reduce the impact from the increased rates, undergo smooth operations as well as comply to the legal requirements of the country.

We, ProConnect Integrated Logistics, have a dedicated team of experienced professionals handling customs clearance in Saudi Arabia, and would be more than happy to help you with your customs clearance requirements. Reach out to us today!

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