The notice related to the announcement in the 2008 budget of the government's intention to raise the VAT registration threshold for certain small businesses to an annual turnover of SAR1mn from the current level of SAR300,000.

However, in a statement published on 28th May, SARS indicated that there continues to be "some public uncertainty" about whether the increase has been implemented already or not.

"The intention is that the increase will coincide with the introduction of the simplified presumptive turnover tax for very small businesses in 2009," SARS explained.

"Although some of the principles of the presumptive tax have been announced, a number of matters remain to be dealt with and refined after consultation with small business," the Service added.

The statement further explained that VAT vendors whose current taxable supplies are more than SAR300,000 but less than SAR1mn per annum exceed the current compulsory VAT registration threshold, and cannot deregister for VAT at this stage.

Similarly, those businesses whose current taxable supplies have exceeded or are likely to exceed SAR300,000 per annum for the first time must still register for VAT.

Draft legislation regarding the increase, the presumptive tax and related matters will be released later this year for stakeholders’ comments, according to the tax authority.