Saudi Arabia triple its VAT from 5 to 15 percent due to global economic crisis.... (ashe namu da sauki, daga 5 zuwa 7). Saudi Arabia ’ s finance minister on Monday said the kingdom will triple its Value Added Tax and halt monthly handout payments to citizens in new austerity measures amid record low oil prices and a coronavirus - led economic slump. The measures, which could stir public resentment with the cost of living rising , come as the petro - state steps up emergency plans to slash government spending to deal with the twin economic blow. “ It has been decided the cost of living allowance will be halted from June 2020 and VAT will be raised from 5 percent to 15 percent from July 1 , 2020, ” Finance Minister Mohammed al- Jadaan said in a statement released by the official Saudi Press Agency. . Jadaan insisted the measures were necessary to shore up state finances amid a “ sharp decline ” in oil revenue as the coronavirus pandemic saps global demand for crude . The government was also “ cancelling, extending or postponing ” expenditures for some government agencies and cutting spending on major state projects introduced as part of an ambitious reform programme to diversify the oil-reliant economy , the minister added . . Jadaan last week warned of “ painful ” and “drastic ” steps to deal with the double shock of the novel coronavirus and record low oil prices . Saudi Arabia , the top crude exporter and the Arab world ’ s biggest economy , has shut down cinemas and restaurants , halted flights , and suspended the year - round umrah pilgrimage in a bid to contain the deadly virus . . Saudi Arabia , along with other Gulf states , imposed a five percent tax on goods and services in 2018 in a bid to generate additional revenue . The petro- state had also introduced handouts worth billions of dollars to citizens, known as the cost of living allowance , to cushion the impact of rising costs . . Saudi Arabia , along with other Gulf states , imposed a five percent tax on goods and services in 2018 in a bid to generate additional revenue . The petro- state had also introduced handouts worth billions of dollars to citizens, known as the cost of living allowance , to cushion the impact of rising costs .