| Author(s) | Mohammed Sultan Al-Sehali*, Yahya Ali Al Jabr** |
| Affiliation | *Assistant Professor of Accounting- King Saud University- Riyadh, ** Assistant Professor of Accounting- Institute of Public Administration- Riyadh |
| Title | Zakat and Tax Objections in the Kingdom of Saudi Arabia: An Analytical View |
| Source | Journal of King Saud University. Administrative Sciences. Volume 19, No 1. (2007/1427) |
| Abstract | This study aims at analyzing the characteristics of Zakat and tax objections in the Kingdom of Saudi Arabia. The study reveals that the current objection mechanism leads to increasing the time needed to settle the objections. It shows that the objections in general take 1117 days on average to be settled. The study finds Zakat objections require more time for settlement (1338 days) comparing with tax objections (844 days). This finding reflects the fact that the Zakat objection settlement requires reviewing many different Islamic constitutional approaches that could be applicable to it. The study also shows that the average amount of the objections reviewed by the First Instance Committee reaches 48,479,878 Saudi Riyals. This shows the importance of quick settlement of these objections to expedite benefiting from potentially large outstanding amounts. In addition, the study shows that the most recurring Zakat objection items are as follows: investments, provisions and allowances, administrative and general expenses, fixed assets and depreciation and loss carry forward respectively. On the other hand, the most recurrent tax objection items are related to: head office expenses and technical services performed abroad, pension expenses paid abroad, administrative and general expenses, employees’ benefits and revenue recognition respectively. The results of this study stress the importance of improving the objection mechanism in order to expedite the objection settlement. The results could open the door to future research aiming at formulating suitable treatments for the most recurring objections. In addition, the findings should appeal to Zakat and tax authorities, in that the evidence presented in this study will help Zakat and tax authorities in their efforts to enhance the objection process in its procedural and objective aspects. |
