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Saudi Arabia contemplating to cut VAT Rate
Riyadh May 27, 2022:
Saudi Arabia is contemplating a cut down in the VAT rate which was increased to 15 percent in 2020 during COVID times. The VAT rate was tripled to shore up finances hit by low oil prices and diminishing global demand due to the raging pandemic.
Minister of Finance Mohammed Al-Jadaan said “We will ultimately consider cutting the VAT but at the moment we are still replenishing the reserves.”
Jadaan added “Saudi Arabia’s policy on fiscal sustainability would ensure that reserves do not fall below a certain percentage level of the country’s gross domestic product.”
The world’s biggest crude exporter, whose economy is estimated at $1 trillion, said in its budget for 2022 that the Fiscal Sustainability Program aims to de-couple the economy from oil price fluctuations, realizing several economic benefits for the non-oil economy and the private sector.