The Kingdom of Saudi Arabia recently announced a suspension of the cost of living allowance as well as the increase in the value-added tax (VAT). This measure is to address the economic impact of COVID-19 in the Kingdom, says the Saudi Press Agency.
“Cost of living allowance will be suspended as of June first, and the value-added tax will be increased to 15% from 5% as of July first,” according to the Ministry of Finance.
Mohammed Al-Jadaan, the Finance Minister, also said that the new regulations are countermeasures amidst the coronavirus crisis and the low oil prices.
“Strict and painful measures” will also be taken by Saudi Arabia to deal with the ongoing crisis both on low oil prices and the pandemic.
“We must reduce budget expenditures sharply,” says Al Jadaan. He also said that there are government projects which will be slowed down to cut off the expenditure.
“Current actions taken to date to cut spending are not enough, and Saudi public finances will need more control and the journey ahead is long,” the Finance minister said.
As of May 12, the coronavirus cases in Saudi Arabia rose to 41, 014, and 12,737 recoveries. 255 have succumbed to the disease.
Source : ArabNews