Monday, 11 May , 2020     |     1665      |      +      |     

Saudi Arabia puts a tight lid on spending, employee allowances

Saudi Arabia puts a tight lid on spending, employee allowances : gulfnews.com
  • Gulf News

Saudi Arabia has tripled its VAT (value-added tax) rate and suspended a cost of living allowance for state employees, thus, 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 per cent from 5 per cent as of July 1,” Finance Minister Mohammed al-Jadaan said in the statement. “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 for the rising cost of living after the government hiked domestic gas prices and introduced value-added tax. About 1.5 million Saudis are employed in the government sector.

The austerity measures being introduced come after the kingdom posted a $9 billion budget deficit in the first quarter. The finance minister said non-oil revenues were affected by the suspension and decline in economic activity, while spending had risen due to unplanned strains on the healthcare sector and the initiatives taken to support the economy.

“All these challenges have cut state revenues, pressured public finances to a level that is hard to deal with going forward without affecting the overall economy in the medium to long term, which requires more spending cuts and measures to support non-oil revenues stability,” he added.

Kuwait Today Business Subscription

Keywords:
Category: #Gulf News, #Saudi Arabia | 2020/05/11 latest update at 5:33 PM
Source : gulfnews.com | Photocredit : gulfnews.com
1666
Comments Add comment

Latest Comments


  
  LinkedIn Gulf Media

Sponsored Publications


Related Articles

The editorial staff of Kuwait Media would like to give all of its readers from Gulf and Kuwait and the whole world the opportunity to participate actively in the development of the website! If you have something interesting, fun, scandalous - just something worth to be seen from more people. Capture it and share it in the Kuwait Today with a short text.

Do you have information you want to reach our readers?

Send article/s

You can subscribe to our Facebook, Twitter and Google pages or use our RSS feed channel to always read the most important news about Kuwait, the Gulf and the world.


Latest searches in Kuwait Today