Saudi Arabia unveiled plans Monday to triple its Value Added Tax (VAT) and halt monthly handouts to citizens as part of a series of austerity measures amid record low oil prices and a coronavirus-led economic slump.
The measures, which state media said would boost state coffers by 100 billion riyals (US$26.6 billion), come as the government steps up emergency plans to slash spending to deal with the twin economic blow.
The austerity drive could stir public resentment amid an already high cost of living and intensify scrutiny of lavish multibillion dollar state projects and expenditure including the proposed purchase of English football club Newcastle United.
“It has been decided the cost of living allowance will be halted from June 2020 and VAT will be raised from 5 per cent to 15 per cent from July 1,” Finance Minister Mohammed al-Jadaan said in a statement released by the official Saudi Press Agency.
