The Commerce Minister has given a hint that Saudi Arabia might reduce the VAT from 15% when the crisis period ends.
This was disclosed in a press conference conducted for the sake of Government commute on the directions of the Crown Prince, Mohammed Bin Salman. Dr. Majid Al Qasabi, who is the Minister of Commerce and the Minister of Information in charge, led the conference.
The government officials have made it clear that the decision to increase VAT (Value Added Tax) was not an easy one. The reason to impose increased VAT was half a trillion riyals of government employee’s wage bill which was not able to cover the revenues collected by oil.
— قناة السعودية 🇸🇦 (@saudiatv) November 19, 2020
Al-Qasabi further explained that additional VAT was implemented as there was a need to cover up the revenues and that the state was not looking for prejudicing salaries or allowances.
The Value Added Tax was the option selected for the sake of resolving a problem of low revenues due to low oil prices.
He claimed that the future economic cycle of the Kingdom of Saudi Arabia will improve as the oil will return to its previous state.
As soon as the crisis end, this decision (of additional VAT) would be reviewed. This decision was taken for the crisis. When the crisis would resolve, the decision would be reverted.
For the latest updates, you can join our WhatsApp group.