Dear MEL Topic Readers,
Saudi Arabia triples VAT to support
coronavirus-hit economy
It was 2015 that the oil-rich kingdom took a
number of strict austerity measures when oil prices collapsed from record
highs, including slashing lavish bonuses, overtime payments, and other benefits and
perks in the public sector. In January 2018, the kingdom’s first value-added
tax was introduced. It was a hard hit to everyone, including ordinary citizens,
migrant workers, and state employees. However, the tax rate was a mere 5% and
state employees were granted a hefty compensation of 1,000 riyals ($267) a
month for the rising cost of living and gas prices, which would offset the VAT
for over $5,000 purchase each month. Now, from July 1 this year, only 30 months after
the introduction, approximately 1.5 million state employees, nearly 20 million other
Saudis, and over 12 million non-Saudis are going to be levied 15% VAT. And
this time, state employees will suffer the hardest hit as their monthly compensation
is suspended as of June 1.
Even though the kingdom is not responsible
for the coronavirus pandemic, who initiated the recent oil price war? What sort
of austerity measures will be applied to royal families?
Read the article and learn about this swift
and drastic austerity measure in the oil-rich desert kingdom.
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