the government of Saudi Arabia to three times increase the value added tax (VAT) as part of austerity measures taken to support hamstrung the pandemic economy.
will Also be temporarily suspended payments in connection with the growth of subsistence level (allowance for the high cost) of public sector employees.
Admission to the Treasury of Saudi Arabia has declined sharply with the fall in energy prices and the cessation of air flights against the backdrop of a pandemic coronavirus.
VAT in this country was introduced only two years ago in an attempt to reduce the dependence of the economy on the world prices for crude oil.
“These measures are painful but necessary to maintain financial and economic stability in the medium and long term and to overcome this unprecedented coronavirus crisis with minimal losses”, — said the Minister of Finance Mohammed al-Jadaan in an official statement.
It was made after the first quarter, expenses exceeded revenues and the budget deficit amounted to $ 9 billion.
oil Revenues in the Kingdom fell during this period by almost 25% compared to the same period of the previous year to 34 billion dollars, and total revenue decreased by 22%.
At the same time, the Central Bank of Saudi Arabia in March reported a sharp decline in foreign exchange reserves to the lowest level since 2011.
These measures are expected to slow down the pace and scale of the economic reform programme “Vision 2030”, which is trying to implement crown Prince Mohammed bin Salman.
last year, Saudi Arabia has managed to obtain a record of 25.6 billion dollars, bringing on the stock exchange in Riyadh primary shares of the national oil giant Aramco.
This was one of the main plans of the crown Prince of modernization of the economy and reducing its dependence on oil prices.
