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Saudi Arabia triples VAT in effort to recoup financial loses  

May 12, 2020 at 1:04 pm

A man counts Saudi riyal banknotes at a market in Riyadh, Saudi Arabia. [Fayez Nurdeline /AFP/Getty Images]

Saudi Finance Minister Mohammed Al-Jadaan yesterday announced additional austerity measures to confront the financial and economic repercussions of the coronavirus pandemic and low oil prices, Saudi Press Agency (SPA) reported.

The minister said the kingdom will triple its Value Added Tax (VAT) from five to 15 per cent as of 1 July and suspend the cost of living allowance to citizens as of 1 June.

The Saudi government has also decided to cancel or suspend some operating and capital expenditures for a number of government agencies and cut allocations for a number of its Vision 2030 reform initiative and mega projects, he added.

According to the minister, the government has also decided to form a ministerial committee to review the financial benefits allocated to public sector employees and contractors, noting that the committee would submit its recommendations within 30 days.

Al-Jadaan pointed out that the new measures would save almost 100 billion riyals ($26.7 billion) and will “maintain financial and economic stability over the medium to long term”.

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