Pandemic shock leads to ‘overhaul’ of Saudi finances

Pandemic shock leads to ‘overhaul’ of Saudi finances

Pandemic shock leads to 'overhaul' of Saudi finances /node/1673421/business-economy. DUBAI: The full scale of the economic shock from the coronavirus pandemic has been revealed in radical measures taken by Saudi authorities to cut allowances, reduce project spending and triple value added tax in what economists called an "immediate overhaul" of the Kingdom's finances.. Tax expert explains why Saudi VAT hike could boost investment /node/1673416/business-economy. In its discussions with the GCC member states around the introduction of VAT, the IMF has been clear that rates of VAT higher than the 5 percent standard rate initially enacted, are necessary to preserve fiscal spending.. The latest announcement brings Saudi Arabia's standard rate of VAT more in line with other global regimes, although still significantly lower than some European regimes where VAT rates are generally in the 20s.. Provided consumer spending remains consistent, and tax revenues are quickly reinvested in the economy, the increase in the VAT rate could be a positive move in the medium to long term.. Since the introduction of VAT, it has been understood by many in the profession that the GCC member states would ultimately look to raise their VAT rates, to align with other global VAT