Alawwal Bank urged to pay SAR 282 mln extra zakat levy

Alawwal Bank said it would have to pay an additional zakat claim of SAR 282 million for the years 2005-2013, after the General Authority of Zakat and Tax (GAZT) applied a new accounting method to the long-term investments of banks, according to the lender's financial statements seen by Argaam.

The final assessments for the period from 2014 and beyond are yet to be raised by the GAZT.

Accordingly, the bank said it expects significant additional zakat exposure if the tax authority maintained the same accounting method and added long-term financing to the Zakat base.

Alawwal has allocated appropriate provisions for the additional claims, but has not disclosed the additional zakat levy in its annual financial statements, due to the potential negative impact on the lender, Alawwal added.

Other banks operating in Saudi Arabia are subject to the same interpretation, and have yet to announce positions and any additional demands issued by GAZT.