Corona virus: Saudi Arabia stops the exchange of high cost of living and increases the value added tax

The Saudi government announced a series of austerity measures, aimed at “facing the economic repercussions of the Corona epidemic.”

On Monday, the official Saudi press agency quoted Finance Minister Muhammad Al-Jadaan as saying the government had taken various measures that would provide some 100 billion Saudi riyals to public funding.

Al-Jadaan added that the most prominent measure of these measures is to stop the exchange of the high cost of living for citizens, starting next June, and raise the rate of value added tax from 5 to 15 percent, from next july.

Al-Jadaan said the Saudi economy received three shocks due to the Corona epidemic, the first of which was falling oil prices due to declining global demand due to closure procedures, resulting in a “significant decrease in state revenue”, and the second “the suspension or decline of many local economic activities, reflected in the negative The volume of non-oil revenue and economic growth,” the third of which is to increase financial credits for the health sector, to support the preventive and curative capacity against the epidemic, in addition to “adopting a series of initiatives to support the economy, reduce the impact of the pandemic and preserve the jobs of citizens.”

Austerity measures included canceling, extending, or delaying some capital and operating expense items for various government agencies, and reducing appropriations for various initiatives to achieve the vision and major projects for fiscal year 2020.

The Saudi Finance Minister stressed the importance of these measures “aimed at protecting the Kingdom’s economy, overcoming the unprecedented global crisis of the Corona pandemic and its financial and economic repercussions with the least possible damage.”

The King of Saudi Arabia, King Salman bin Abdulaziz, issued a royal order, on December 9, 2019, to extend the disbursement of the cost of living subsidy, for an additional year until the end of 2020.

The Saudis receive a high cost of living allowance of 500 riyals per month for the retirement pension that is disbursed from the General Pension Agency and the General Organization for Social Security.

Since disbursing the high cost of living allowance, the Kingdom aims to help citizens adapt to economic changes taking place in line with Vision 2030, which is the development plan adopted by Crown Prince Mohammed bin Salman .

The announcement of the decision to stop the disbursement of the high cost of living and increase the value added tax came hours after King Salman decided to disburse the month of Ramadan aid, during which Muslims fast, to citizens who they benefit from the social solidarity system.

On Sunday, the Saudi Press Agency reported that King Salman ordered the disbursement of 1.85 billion riyals to the beneficiaries, in the amount of 1,000 riyals for the family and 500 riyals for the dependents, adding that the decision is a concern of the Saudi monarch “to provide everything that would provide a decent life for citizens.”

1. Corona virus: what are its symptoms and how to protect yourself from it?
2. Corona virus: what are the chances of dying from infection?
3. Corona virus: Are women and children less likely to get sick?
4. Corona virus: how few people transmit viruses?