Saudi Arabia has announced new austerity measures to support its Coronavirus hit economy.
The country is reducing its cost of living allowance for government employees and tripling its value added tax (VAT) to shore up finances.
Saudi Finance Minister, Mohammed al-Jadaan, said on Monday that the measures would boost revenue amid a ‘sharp decline’ in oil revenue,
Saudi Arabia introduced a 5% VAT in 2018, but the minister said it would surge to 15% starting from July 1.
Al- Jadaan also said that some operational and capital spending would be canceled or delayed, including spending on some programmes under Crown Prince Mohammed bin Salman’s “Vision 2030” economic transformation plan.
He added that Saudi Arabia would cancel or postpone spending on some government agencies as well as cut spending on major state projects which were aimed at diversifying the economy which was dependent on crude oil revenues.
According to the minister, a committee would be set up to look into issues regarding salary benefits given by government establishments in the civil service and report within 30 days.
Workers at the first- tier of government will get very significant salaries compared to state workers.