Saudi Arabia launched on Tuesday the E-invoicing (FATOORAH) project; which will contribute to bringing down hidden economy transactions and promote fair competition.
Several officials and specialists in this sector attended the launching ceremony. Implementation of FATOORAH’S first phase will begin on Dec. 4 this year.
The project is part of the endeavors towards digital transformation in all transactions of the public sector. This also will assist tremendously the efforts made by several government agencies to combat commercial concealment (tasattur).
The project is one of the vital national initiatives; spearheaded by the Zakat; Tax and Customs Authority; in achieving the desired digital transformation as spelled out in the Kingdom’s Vision 2030.
Addressing the launching ceremony; Suhail Abanmi; governor of the Zakat; Tax and Customs Authority; stressed that FATOORAH is one of the vital projects as it comes as an extension of various digital projects presented by the authority during the past years in implementation of the Kingdom’s Vision and goals in achieving the desired digital transformation.
“The FATOORAH project is in line with the latest developments in the world’s leading economies; and also will have a tangible impact on the national economy.
“The project will contribute to reducing the hidden economy transactions and promoting fair competition; in addition to contributing significantly to the efforts made by several government agencies to combat commercial concealment; apart from playing its essential role in enriching the consumer experience;” he added.
For his part; Saleh Al-Rasheed; governor of the General Authority for Small and Medium Enterprises (Monshaat); said that the impact of the application of e-invoicing brings several positive benefits to the sector; also most notably the provision of a fair and attractive competitive environment for growth and further prosperity; especially since billing contributes to eliminating commercial concealment.
“This will also facilitate access to financing and banking facilities while taking into account of the fact that e-invoicing ensures the availability of accurate financial statements. The new procedure also increases the efficiency and operation of facilities and reduces costs by regulating accounting work accurately;” he pointed out.
Speaking on the occasion; Ahmed Al-Suwailem; CEO of the Anti-Commercial Concealment Program; also said that the e-invoice project would open an important window for small and medium enterprises on credit.
“FATOORAH is an incentive for legal enterprises and further that reduces waste of time and money; in addition to contributing to improving after-sales services to consumers and preserves the rights of both parties;” he said.
Elimination of illegal ways
The new procedure will narrow the disguised and illegal establishments; as it will activate the consumer’s role in monitoring and reporting; raise transparency over the movement of funds; and also enable the control of crimes and related violations.
Abdullah Al-Fantoukh; director of the FATOORAH project; also said that the success of the project depends on the cooperation of all parties concerned.
“The project would be positive and would limit the phenomenon of commercial concealment and the hidden economy; apart from helping the taxpayers in organizing financial matters;” he said; also adding that the impact of the project will appear over the coming years.
The application of the first phase will start on taxpayers subject to the E-Invoice Regulation starting from Dec.4 and that requires the issuance and storing of tax invoices and related debit and further credit notices electronically.
The second phase will be implemented in a phased manner starting from the beginning of January 2022; as it will consolidate integration between the electronic systems of taxpayers; and the systems of the Zakat; Tax and Customs Authority.
Meanwhile; the authority called on the public to visit the FATOORAH page on its website; to see all the details before starting the implementation of the project.
There are three main steps for taxpayers who are subject to the FATOORAH regulation. These are stop issuing handwritten invoices; or invoices issued manually through text editing softwares.
Secondly; create an ability to generate and also store the invoices electronically through a compliant E-invoicing system; which can be a cash register machine; a cloud system; or an enterprise resource planning software (ERP).
Thirdly; the simplified tax invoices must include a QR code; and further the tax invoices must include the VAT number of the buyer if the buyer is a registered VAT taxpayer.