The prices of staying in Hotels, furnished apartments and commercial residence of Saudi Arabia are more expensive now after the introduction of new Municipal tax in the Kingdom. New : Makkah to Madinah train

The new municipal tax on hotels is different from the available Value Added Tax (VAT) of 5% (introduced from 1st January 2018) and the existing service tax.

- As per the various sources guests and travelers, from now will pay 25 to 30 percent more compare to earlier cost for each hotel room. Recommend : Penalties and fines on expiry iqamas

- The new municipal tax is 5% on each occupied room and for the hotels with 3 stars and below three stars the levy will be reduced to 2.5% and it is already applied from this week.

- The amount of tax must be deposited to the ministry account each month by following a new account system and procedure. Various hotels are displaying it already and notifying the customers about the new municipal tax. Related : 6 months time to companies to pay expat levy

- The tax on hotels came after 2 to 3 years of difficulty in the Saudi hotel industry, Which has been hit by new supply and reduced corportate bookings linked to the weaker economy.

- As per the research firm STR preliminary data, There is a dip of 2.4% in average daily rate in Jeddah on January with 732.33 Saudi Riyals and a dip of 2.1% in revenue in available room to 370.33 Saudi Riyals. Similar : Car rental outlets jobs only for Saudis

- Occupancy rate in the hotels is from 0.3 per cent to 50.6 per cent. Hotels and commercial residential facilities will have to register in the ministry which will provide them a unique number in order to access to their accounts in the ministry.

Guests of hotels to pay new municipal tax in Saudi Arabia

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