VAT hike aims to shore up Saudi’s finances amid low risk of public resistance

VAT hike aims to shore up Saudi’s finances amid low risk of public resistance

**Written and disseminated among select contacts on May 12**

Saudi Arabia announced a series of measures on Monday – including a three-fold hike in VAT from July – to address a sharp deterioration in its financial position. A policy response to the twin crises of lower oil prices and the global coronavirus pandemic was inevitable, but the austerity measures are far-reaching and will hit Saudis at a time when many businesses are already struggling amid severely restricted economic activity.

Rachna Uppal | Senior Analyst | r.uppal@castlereagh.net