‘It looked like Black Friday’: Saudis stockpiled ahead of VAT increase, but ‘triple whammy’ is hitting kingdom’s economy

‘It looked like Black Friday’: Saudis stockpiled ahead of VAT increase, but ‘triple whammy’ is hitting kingdom’s economy

Citizens across Saudi Arabia poured into stores once coronavirus lockdown restrictions were lifted in June, hoping to save money on non-perishable goods from food and clothing to electronics and cars ahead of the kingdom's tripling of its value-added tax, or VAT. 

Riyadh announced the levy “” which increased from 5% to 15% on July 1 “” in May as a means of boosting state revenue as oil prices plummeted as the pandemic lockdowns battered the economy. But it could hurt consumer recovery, some experts say, warning that the jump in spending of the last month could come to a screeching halt through the rest of the summer and into the fall. 

"People attacked the malls and shopping centers. It looked like Black Friday sales," Ali Almarri, a business owner living in the eastern city of Khobar, told CNBC. Almarri wanted to buy a new car before the tax increase set in, only to find that cars were completely sold out at every dealership he visited.  

"A salesman at one dealership told me they sold more cars in the last month than in the prior five months. People want to save money and they don't want to have to pay the VAT."  

An economic 'triple