Mon 11-05-2020 12:23 PM
RIYADH, 11th May, 2020 (WAM) -- Saudi Arabia will increase its value-added tax, VAT, from 5 to 15 percent in July, the Finance Ministry said on Monday, as part of moves to support the economy amid the novel coronavirus pandemic, reported the Deutsche Presse-Agentur, DPA.
Starting in June, the Kingdom will suspend its cost of living allowance, a bonus King Salman ordered two years ago for state and military employees.
Finance Minister Mohammed Al Jadaan said the pandemic had caused a decline in revenues, thus requiring the government to cut expenditures and introduce measures to support stability of non-oil revenues.
The measures are painful but necessary, Al Jadaan said in a statement.
The Kingdom will also reduce allocations for some projects that are part of Vision 2030, an ambitious plan championed by Crown Prince Mohammed bin Salman to diversify the oil-reliant economy.
Saudi Arabia has reported more than 39,000 confirmed cases of COVID-19, the highest in the Arab world. It recorded 246 deaths.
The Gulf country has taken a string of measures since March to stem the spread of the virus, including a partial or total lockdown on different cities, suspending religious trips and halting international and domestic flights.
It has already announced measures worth 120 billion Riyals (US$32 billion) to support businesses affected by the virus outbreak. It also decreased its planned 2020 spending by five percent to reduce the impact of low oil prices.