KSA: Customs Duty Exemptions

KSA: Customs Duty Exemptions

Saudi Arabia has initiated a policy to exempt various manufacturing imports from customs duties, aiming to boost the nation’s industrial growth. The exemption applies to a broad spectrum of items, including raw materials, partially processed goods, packaging materials, machinery, equipment, and spare parts, facilitating a tax-free entry.

The Ministry of Industry and Mineral Resources introduced this regulation in March, intending to alleviate financial burdens and lower operational costs for companies with valid import licenses. Effective from 01.04.2024, this exemption strategy is expected to enhance the competitive edge and profitability of businesses by reducing their expenditure on customs duties.

The initiative is projected to allow companies to redirect financial resources towards enhancing their operational activities and expanding their production capabilities, contributing to the industrial sector’s growth and development within the kingdom, as reported by the Saudi Press Agency. Furthermore, the ministry’s announcement extended the customs exemption to include completely manufactured goods, materials, and items crucial for the production process. The ministry also mentioned that domestically produced items, whether finished goods or imported materials necessary for manufacturing, could qualify for customs duty exemptions if justified, aiming to support the domestic industrial capabilities. Expanding the industrial customs exemption is in line with the kingdom’s commitment to strengthening its industrial sector and improving manufacturing skills, aligning with the goals of Saudi Vision 2030 and the National Industrial Strategy. This reaffirms the ministry’s significant role in promoting, enabling, and accelerating the industrial sector’s growth in the Kingdom. According to the Ministry of Industry and Mineral Resources, the industrial sector witnessed a 10 percent increase in the number of industrial units in 2023, totaling 11,549.

Jarrah Al-Jarrah, a spokesperson for the ministry, revealed in February that these initiatives are part of an investment totaling SAR 1.54 trillion (USD 48.4 billion). This growth in industrial facilities aligns with Saudi Arabia’s broader strategy to escalate industrialization, with an ambition to reach 36,000 factories by 2035. In 2023, the issuance of 1,379 new licenses was recorded, reflecting investments surpassing SAR 81 billion.

The industrial sector’s consistent expansion is a cornerstone of Saudi Arabia’s Vision 2030 for economic diversification, with the manufacturing sector’s assets reaching USD 132 billion since the strategy’s inception in 2016.


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