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Saudi Arabia

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Royal decrees issued to help Saudis cope with VAT, price rises

JEDDAH: The Saudi government on Saturday introduced measures to help citizens adjust to the new 5-percent value-added tax (VAT) and a hike in fuel and electricity prices.
The royal decrees include a financial support package to help citizens adjust to economic reforms.
The package includes citizens working in the state’s civilian and military sectors, as well as pensioners and students. It covers housing, education, health care and a rise in salaries.
For the next 12 months, Saudi civilian and military workers will see their salaries rise by SR1,000 ($267), while welfare recipients and pensioners will get an extra SR500 monthly for the rest of the year.
For one year, the state will also bear VAT for citizens using private health care and education.
Students in public universities will receive a 10-percent rise in their monthly allowances to help them cope with VAT.
The government supports Saudi students in public universities with a monthly allowance of $200-$300.
Students depend on these allowances for their study commitments, transportation, housing and personal needs.
Soldiers on the Kingdom’s southern border will get a one-time bonus of SR5,000. Also, first-time home buyers will have the VAT paid by the state — not exceeding in value SR850,000 — on the purchase.
The Kingdom is moving to reduce its reliance on oil, which is the biggest source of state revenue.
On the impact of these decrees, social media became a space for virtual celebration through which Saudis expressed their joy at the decision they described as generous.
Last year, the Ministry of Commerce and Investment claimed that the Kingdom’s recent economic reforms have seen the country ranked 10th in a report on the World Bank’s Minority Protection Index.
The World Bank Group report said the Kingdom is among the top 20 reformist countries in the world, and the second among the top high-income countries in the G-20 countries in terms of implementing reforms to improve the business climate.
 

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