Saudi announces tough austerity measures, triples value-added tax to counter COVID-19 losses

Kingdom of Saudi Arabia (KSA) has announced that it will triple its value added tax (VAT) and halt monthly handout payments to citizens in tough new austerity measures amid record low oil prices and a coronavirus-led economic slump.

The measures, which could stir public resentment with the cost of living rising, come as the country steps up emergency plans to slash government spending to deal with the twin economic blow.

“It has been decided the cost of living allowance will be halted from June 2020 and VAT will be raised from 5 percent to 15 percent from July 1,” Finance Minister Mohammed al-Jadaan said in a statement released by the official Saudi Press Agency.

Al-Jazeera