Saudi Arabia increases VAT on goods, amid citizens’ discontent

RIYADH, July 1 (YPA) – The Saudi authorities implemented on Wednesday a decision to increase the rate of value-added tax (VTA) on goods and services from 5 percent to 15 percent.

Many Saudis expressed on social networking websites their deep dissatisfaction with this decision, which will pose a burden on them, especially in light of the noticeable decline in their country’s economy due to the authorities’ wrong policies there and their lavish spending on arms deals.

Saudi Arabia had taken a decision on May 11th to increase the VAT on goods and services subject to it in the commercial markets, as a result of the oil sector being affected by the repercussions of the Corona virus pandemic, which led to the collapse of oil prices, the country’s main source of income.

The Saudi economy witnessed a contraction of 1 percent in the first quarter of this year, as a result of the contraction of the oil sector by 4.6 percent.

Saudi Arabia has reduced its government spending for 2020 by about 13.3 billion dollars, and is scheduled to borrow 220 billion riyals (58.7 billion dollars), with an increase of 100 billion riyals (26.7 billion dollars) from what was planned before Corona crisis.

YPA