Open AccessThe Value-Added Tax (VAT): Effects on Saudi Economy in The Light of The Saudi Vision 2030
Author(s) -
Ghadeer Amer Albishi,
Muneerah Alshabanah
Publication year - 2020
Publication title -
international journal of scientific research in science and technology
Language(s) - English
Resource type - Journals
eISSN - 2395-602X
pISSN - 2395-6011
DOI - 10.32628/ijsrst1207229
Subject(s) - purchasing power , value added tax , revenue , tax revenue , indirect tax , subsidy , public economics , value (mathematics) , business , tax reform , tax credit , economics , ad valorem tax , purchasing , direct tax , added value , accounting , finance , market economy , macroeconomics , marketing , machine learning , computer science
The aim of this study is to know the impact of Value-added Tax imposition on Saudi economy in light of the Saudi Vision 2030, we assumed that the Value-added Tax leads to an increase in general revenues, and it affects the purchasing power, we also assumed that the provision of subsidies lowers the tax burden. This study follows the descriptive methodology in the literature review and the analytical-inductive methodology in collecting data to examine the assumptions by using a questionnaire. This research generally discussed taxes by reviewing its definitions, characteristics, and objectives, it also mentioned the technical regulations of taxation and analyzed the questionnaire results and estimated the Value-added tax revenues contribution in general revenues. The main conclusions were that the Value-added tax imposition leads to an increase in prices which in turn decreases the purchasing power, also the revenues from the Value-added Tax contributed in increasing general revenues, and the most important recommendations were to establish rules on commercial institutions to prevent prices manipulation after the tax is implemented. In addition, this research recommended directing Value-added tax revenues for infrastructure spending and improving government services.