RIYADH, Nov. 20, 2019 (Xinhua) -- Saudi King Salman bin Abdulaziz Al Saud (C, Front) attends the 7th session of the Shura Council in Riyadh, Saudi Arabia, on Nov. 20, 2019. Saudi King Salman bin Abdulaziz Al Saud said on Wednesday that the revenues of the Saudi Aramco's initial public offering will be channelled to Saudi Arabia's sovereign wealth fund to boost investment inside and outside the kingdom, the Saudi Press Agency reported. (Xinhua/IANS) by .
Saudi King Salman bin Abdulaziz Al Saud (C, Front) (Xinhua/IANS)

The Kingdom of Saudi Arabia has announced that it is planning to triple its value added tax (VAT) as part of austerity measures to boost the coronavirus-hit economy.

According to BBC reports, the government in Riyadh also said it will suspend its cost of living allowance to shore up state finances.

Saudi has seen its income plummet as the impact of the pandemic has forced down global energy prices, the BBC reported.

VAT was first introduced in Saudi two years ago as part of efforts to cut its reliance on world crude oil markets.

Saudi Arabia’s state news agency said VAT will increase from 5% to 15% as of 1 July, while the cost of living allowance will be suspended from 1 June.

The announcement came after state spending outstripped income, pushing the kingdom into a $9bn (£7.2bn) budget deficit in the first three months of the year, the BBC report said.

As an impact of the pandemic the kingdom’s central bank also saw its foreign reserves fall in March at their fastest rate and into their lowest level since 2011.



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