Saudi: VAT Increased, Cost of Living Allowance Suspended

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Saudi Arabia’s government is suspending the cost of living allowance and raising the value added tax (VAT) threefold, as part of measures aimed to shore up state finances, which have been battered by low oil prices and the coronavirus.

Mohammad Aljadaan, The Minister of Finance and Acting Minister of Economy and Planning, highlighted the importance of the measures undertaken to protect the Saudi economy and overcome the unprecedented financial and economic ramifications of the global Covid-19 pandemic in the best way possible, stressing that these measures complement previously made decisions to mitigate the negative effects of the crisis from a health perspective, as well as economically and socially.

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The Minister emphasized that the crisis caused by the global pandemic resulted in three economic shocks, each of which could in itself have an extremely negative effect on the performance and stability of public finance had the government not intervened by taking measures to absorb them.


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