What is VAT Tax?
Saudi Arabia imposed VAT on January 1, 2018 (Rabi Al-Thani 14, 1439). This increased overall cost for Umrah and Hajj travelers to Saudi Arabia. VAT was introduced at a standard rate of 5%. This is payable to all consumers who are either local resident or visiting Saudi Arabia. Beside VAT, Saudi Arabia has also implemented 5% municipal Tax which also be directly or indirectly effecting Hajj and Umrah travelers. Labaik Tours a Virginia USA based Hajj and Umrah company has dropped the Hajj Package prices and absorbing almost half of the cost of these Taxes to minimize the burden on Hajj and Umrah Travelers.
A value Added Tax (or VAT) is an indirect tax imposed on all goods and services that are bought and sold by businesses, with a few exceptions. VAT is applied in more than 160 countries around the world as a reliable source of revenue for state budgets. VAT is imposed at each stage of the supply chain from the production and distribution to the final sale of the good or service.