DW: Riyadh slashes welfare as oil and coronavirus effects kick in
Saudi Arabia has unveiled plans to triple valued-added tax (VAT) and stop monthly payments to citizens. Record low oil prices and the effects of the coronavirus pandemic are taking their toll.
Saudi Arabia has decided to cut its cost of living allowance from June and to hike VAT from 5% to 15% from July 1.
As record low oil prices and the effects of the coronavirus crisis take their toll, Finance Minister Mohammed al-Jadaan said in a statement on Monday that the measures were necessary "to shore up state finances" amid a sharp decline in oil revenue, as the coronavirus scare reduces global demand for crude and cuts growth forecasts. The IMF projected the Saudi economy would fall 2.3% this year.
"So far, the minister of finance announced that the 'citizen account' that benefits lower income Saudis will not be affected," Yasmine Farouk, visiting scholar at the Carnegie Endowment for International Peace, said. "The increase in VAT will however affect the standard of living of all Saudis but those who will feel it the most would be the poorer of course."
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WNU Editor: The Saudi government's dependency on oil exports is crippling it's revenue stream. These austerity measures are not going to solve the Kingdom's problems.
More News On Saudi Arabia's Austerity Measures
Saudi Arabia triples taxes, cuts $26 billion in costs amid pandemic -- PBS
Saudi Arabia triples VAT and suspends handouts -- Asia Times
Saudi Arabia Unveils Austerity Program, Including Tripling Of VAT, To Fight Coronavirus Impact -- IBTimes
Pandemic shock leads to ‘overhaul’ of Saudi finances -- Arab News
Saudi Arabia, Qatar worst hit by coronavirus among Arab states -- Middle East Monitor
Oil Price War Puts Entire Kingdom Of Saudi Arabia At Risk -- OilPrice.com
Saudi Arabia’s latest oil production cuts show it is back in ‘whatever it takes’ mode, strategist says -- CNBC
1 comment:
The Kingdom needs to figure which century they live in.
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