Pushed into austerity by virus and oil slump, #Saudi triples VAT rate - Reuters

Pushed into austerity by virus and oil slump, Saudi triples VAT rate - Reuters:

Saudi Arabia will triple its value added tax rate and suspend a cost of living allowance for state employees, the kingdom’s finance minister said on Monday, seeking to shore up finances hit hard by low oil prices and a coronavirus-driven slowdown.

“The cost of living allowance will be suspended as of June 1, and the value added tax will be increased to 15% from 5% as of July 1,” Finance Minister Mohammed al-Jadaan said in the statement reported by the state news agency.

“These measures are painful but necessary to maintain financial and economic stability over the medium to long term...and to overcome the unprecedented coronavirus crisis with the least damage possible.”

In 2018, Saudi Arabia’s King Salman ordered a monthly payment of 1,000 riyals ($267) to every state employee to compensate them the rising cost of living after the government hiked domestic gas prices and introduced value-added tax.