The government of Saudi Arabia has officially announced the postponement of implementation of the additional import duties on various goods, including steel products, for an indefinite period. No reason has been given for this move so far: however, steel market players believe that the Saudi authorities do not want to create additional pressure as the economy has already been hit by low oil prices and Covid-19. “There were many complaints that increasing VAT from five to 15 percent plus the increase in custom duties was going to hit citizens hard,” a local trader said. “They might have delayed it because they think the market is not ready for it now because of Covid-19 and the effect of the lockdown on business,” a producer told SteelOrbis.
Earlier, the government had announced it will increase the import tax on various goods, including steel, in order to compensate for the losses that Saudi Arabia had to face during past months. Starting from June 10, the rates would have been increased from five to 10 percent for square billet, from 5 to 10-15 percent for hot rolled coil (HRC) and from 5 up to 15 percent for coated products. In the longs segment, the tariffs for rebar and wire rod would have been increased from 10 to 15 and 20 percent, respectively. It is worth mentioning that local steel market sources strongly believe that the increase will be implemented once businesses become more sustainable and the overall market environment improves.