Posted by : Aahil Shaik Friday, February 16, 2018


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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