Saudi Arabia to triple VAT among other ‘painful’ austerity measures

Saudi Arabia to triple VAT among other ‘painful’ austerity measures

Saudi Arabia's spending cuts come amid a plunge in oil prices, hurting the government's finances.. Saudi Arabia will triple its value added tax rate and suspend a cost-of-living allowance for state employees, the kingdom's finance minister said on Monday, seeking to shore up finances hit hard by low oil prices and a coronavirus-driven slowdown.. The credit ratings agency early April cut its outlook for sovereigns and companies in Saudi Arabia, the Arab world's biggest economy.. The fallout of the coronavirus and oil-price collapse will offer a once-in-a decade opportunity for distressed debt investors in the Persian Gulf, according to Sancta Capital Group Ltd.. Moody's Investors Service has cut its outlook and ratings for sovereigns and companies from Saudi Arabia, the Arab world's biggest economy, to Emaar Properties PJSC, one of the region's largest listed developers, and port operator DP World.. On top of the impact of low oil prices and the virus, Gulf companies are facing other challenges, which offer opportunities for distressed debt investors.. Sancta Capital, which has offices in Houston and Dubai, has $130 million of assets under management in mainly the U.A.E., Kuwait, Egypt and Saudi Arabia..