Saudi Arabia announces a rise in the value-added tax (VAT) rate to 15 percent, starting July 1st , according to Saudi Press Agency.
Mohammad Al Jadaan, Saudi Minister of Finance, said the measures are to be implemented in order to protect the Kingdom’s economy and reduce its financial repercussions caused by the unprecedented global crisis.
The minister pointed ou the first shock was an uprecedented decline in oil demand, causing a sharp drop in oil revenues, the main source of public revenues for the state budget.
“The second shock was a decrease in many local economic activities, which negatively affected the volume of non-oil revenues and economic growth, “ he said.
The third shock ensued as urgent expenditures required government intervention, the health sector being the most affected having to provide the enhanced quality of health services during the crisis.
“We are facing a crisis that the world has never seen before in modern history. One of its most important features is uncertainty, difficulty in knowing and anticipating its extent and repercussions in light of daily developments that require governments to deal with them with vigilance and the ability to take appropriate decisions at appropriate times and quickly respond and adapt to conditions in a way that achieves the public interest and protects citizens and residents, providing the basic needs and necessary medical services. The measures that were taken today were painful, but they are necessary,” he said.