With the start of the General Authority for Zakat and Income and the collection of value-added tax on sold residential property , another problem arises for real estate developers in completing the sale to the end consumer, especially when the beneficiary is one of those who have waited for many years on the Ministry of Housing’s lists to achieve his great dream of settling in his home away from real estate offices and the pursuits of landlords.
Once again, we are knocking on the door of bureaucracy, which stands as a stumbling block to the completion of many transactions, despite the efforts made by the relevant authorities and the newly introduced systems. We find a lot of overlap and confusion that limits the smooth flow of work, and developers and beneficiaries of the Ministry of Housing’s products face many obstacles.
Before the citizen can fully enjoy his first home, he faces the obstacle of the added value due from the sale of the property exempt from fees . When the monthly or annual declaration is submitted by the seller to the General Authority for Zakat and Income, he is required to pay the value of the tax of 42,500 riyals for each exempt house or unit. First, he goes back to the Ministry of Housing to collect what he paid by submitting his papers, then it is transferred to the Ministry of Finance, which in turn transfers you loaded with the papers and what is required to prove the right to the exemption, and you have to wait in other lists until your request is approved by the Ministry of Finance.
Despite the computerization of procedures in ministries, citizens and developers face further complications if even a single document is missing or lost while shuttling between ministries and offices. They will not be able to communicate with the authorities until all their paperwork is complete. The requirement for sellers to pay VAT when submitting their tax returns to the General Authority for Zakat and Income Tax is a burden for both citizens and real estate developers, who are appealing to the Ministry of Housing and the Zakat and Income Tax Authority to find a mechanism that facilitates their work and encourages them to provide and build housing for citizens. When you explain your situation to the Zakat and Income Tax Authority and request a tax exemption as you are entitled to it, they present you with an impossible solution: "Pay first, then collect the amount from the Ministry of Housing!"
Collecting VAT is a tiring process.
This is a tiring and exhausting journey for the real estate developer or the seller who sells his house. It is a waste of effort and time in an era where a person can do his shopping and obtain his services from home. It is better and easier to have facilitating solutions, such as having a clearing between Zakat and Income and the Ministry of Housing, as happens between banks in checks or points of sale or withdrawal. It is an equation that is not complicated and can be easily solved between the two parties, and this is what Vision 2030 requires.
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