Saudi Arabian tax project commences

Group Bull, France has concluded the final contractual negotiations with the Department of Zakat and Income Tax (DZIT) of the Saudi Arabian Ministry of Finance for the development and implementation of a complete tax administration system for Saudi Arabia.

The contract was awarded to Bull as part of an international tender process managed by the Saudi tax authorities. The project, which will be managed by the Bull Tax Competence Centre in Johannesburg, will commence in mid-2003 and calls for the conversion of the Bull Tax Administration system into Arabic as well as customisation to meet the specific Saudi Arabian tax regime requirements. The project will run over a period of 23 months and will be succeeded by a two-year warranty period.

DZIT is an agency of the Ministry of Finance headed by a director-general reporting directly to the minister. The agency is responsible for the administration and collection of income tax and Zakat (an Islamic form of taxation). Income tax is levied on domestic income generated within the kingdom by foreign-owned (or partly-owned) businesses and certain foreign professionals.

Zakat is levied on income and capital of businesses owned (or partly owned) by Saudi and GCC (Gulf Cooperation Council) citizens. In addition to the head office with its policy-making and monitoring responsibilities, DZIT is operationally organised by regional branch offices located in Riyadh, Jeddah, Madinah, Makkah, Qassim, Dammam, Abha, Taif and Tabuk, plus a Large Taxpayer Unit (LTU) located in the head office, administering the largest zakat/taxpayers irrespective of their place of business. The branch offices located in the three major cities of Jeddah, Riyadh and Dammam are the largest in terms of taxpayer numbers, staff and share of nationally collected revenue. Zakat administration of small locally owned businesses outside the branch office locations is delegated to 25 finance offices.

Due to the excellent wide area networking and communications facilities in the kingdom, the application will be deployed using a centralised architecture being run and managed from the DZIT head offices in Riyadh. The Web-based tax administration system manages all aspects of taxpayer registration, returns processing, assessments, enforcement, collections, audit and accounting and has been developed using Oracle and other Web technologies. It permits tax administrators to readily modify data entry screens, tax and audit rules as well as workflow processes as legislation amendments influence forms, processes and computational rules within the revenue authority.

Saudi Arabia is a monarchy occupying most of the Arabian Peninsula with an area of about 2 240 000 sq km with the capital and largest city being Riyadh, in the central part of the kingdom. The country has an estimated population of 22.7 million people with a per capita GDP in excess of $6 500 per year.