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The Zakat, Tax and Customs Authority carried out the inspections in markets and commercial establishments in cities and regions throughout the kingdom in coordination with other government agencies. The authority focused on retail businesses, gold and jewelry shops as well as tobacco sales outlets. ZATCA spokesperson Hamoud Al-Harbi identified the most frequent violations as failure to issue electronic invoices, collect value-added tax and apply required tax stamps to tobacco products. According to the authority these checks form part of its regular compliance monitoring activities.
ZATCA first outlined its penalties for e-invoicing violations in a 2021 announcement that was updated in subsequent guidelines. A ZATCA document on the rules states that field violations typically begin with a warning and correction period before fines are imposed. The authority applies escalating penalties for repeated offenses, with amounts that can reach tens of thousands of Saudi riyals depending on the specific breach and frequency. Such measures have been in place since value-added tax was introduced in the kingdom.
The authority encouraged the public to report suspected tax violations through its official website or mobile application. ZATCA operates a whistleblower reward system that pays 2.5 percent of the confirmed violation value. Rewards range from a minimum of 1,000 Saudi riyals to a maximum of 1 million Saudi riyals, the authority said.
ZATCA guidelines published in 2022 specify that initial detection of many e-invoicing failures results in a notice rather than an immediate fine. Subsequent repetitions within set periods trigger monetary penalties that increase progressively. The authority applies similar graduated enforcement to VAT collection lapses and missing excise stamps on tobacco. These procedures have remained consistent in recent years.
Hamoud Al-Harbi noted that the inspections covered a range of commercial activities where compliance risks are higher. The spokesperson added that the authority continues to monitor adherence to electronic invoicing mandates rolled out in phases since 2021. ZATCA data from earlier periods showed similar patterns of violations related to invoicing and stamping requirements.
The authority did not release a detailed geographic or sectoral breakdown of the 61,000 inspections in its second-quarter update. ZATCA has previously indicated that retail and wholesale sectors account for a substantial share of field visits each year. Its published penalty framework applies uniformly once violations are confirmed after the initial warning stage.
