Soon after entering 2018, Saudi Arabia imposed 5% Value Added Tax (VAT) which has increased the cost of living. However, after considering the consequences Saudi Arabia has announced to increase the salaries and allowances of public sector employees and military personnel to lessen the VAT burden.
The authorities of Saudi has said that they would spend billions of riyals to help citizens to offset the impact of VAT and a surge in gasoline and utilityprices, a move that would help ease public discontent while highlighting the kingdom’s struggle to overhaul its economy.
The royal decrees include a financial support package to help citizens adjust to economic reforms.The package includes citizens working in the state’s civilian and military sectors, as well as pensioners and students. It covers housing, education, health care and a rise in salaries.