Saudi Arabia announces VAT increase to 15%

Saudi Arabia has announced an increase in value-added tax rate (VAT) as part of fiscal measures the Kingdom is taking to support the economy during the COVID-19 crisis. The 5 to 15% VAT rate will be effective in July. 

The suspension of economic activity to protect nationals and residents of the Kingdom started late March and left a negative impact on the non-oil sector of the Saudi economy, a key component of the Saudivision and a project the Kingdom has been working on growing since 2016. 

The measures also included suspension of cost-of-living allowances, effective June, as well as an expenditure reduction to SR100 billion which included some Vision 2030-associated programs and other projects.