Hard Times - Saudi Arabia Triples Tax to support coronavirus-hit economy

[ARMalik]

Saudi Arabaia and other Middle East countries like UAE are in deep economic troubles and it will get much worse in the coming months as their revenue and cash flow gets a massive hit.

https://www.bbc.com/news/business-52612785
Saudi Arabia triples VAT to support coronavirus-hit economy

Saudi Arabia is tripling its value added tax (VAT) as part of austerity measures to support its coronavirus-hit economy.

The government in Riyadh also said it will suspend its cost of living allowance to shore up state finances.

The oil-rich nation has seen its income plummet as the impact of the pandemic has forced down global energy prices.

The kingdom first introduced VAT two years ago as part of efforts to cut its reliance on world crude oil markets.

Saudi Arabia's state news agency said VAT will increase from 5% to 15% as of 1 July, while the cost of living allowance will be suspended from 1 June.

The allowance of 1,000 riyals ($267; 245 euros) per month to state employees was introduced in 2018 to help offset increased financial burdens including VAT and a rise in the price of petrol.

"These measures are painful but necessary to maintain financial and economic stability over [the] medium to long term... and overcome the unprecedented coronavirus crisis with the least damage possible," finance minister Mohammed al-Jadaan said in the statement.

 

[The SC]

"These measures are painful but necessary to maintain financial and economic stability over [the] medium to long term... and overcome the unprecedented coronavirus crisis with the least damage possible,"

That is true..

 

[PakFactor]

"These measures are painful but necessary to maintain financial and economic stability over [the] medium to long term... and overcome the unprecedented coronavirus crisis with the least damage possible,"

That is true..

Globally this is just the start, economies in the micro level are severely impacted. I’m afraid lots of business will be permanently shut down and lots of jobs will not be coming back. From my insurance clients they are saying problem isn’t when we will open, but what will the environment look like after we open.

Sadly, this is going to have some long term effects. Hence when I look at US stock markets and local level businesses it’s detached with 5-8 companies lifting the market up. I also feel we in the states will be getting hit with taxes and rate increases soon.

 

[Aramagedon]

Many things are changing in Saudia very very rapidly .....

 

[The SC]

Globally this is just the start, economies in the micro level are severely impacted. I’m afraid lots of business will be permanently shut down and lots of jobs will not be coming back. From my insurance clients they are saying problem isn’t when we will open, but what will the environment look like after we open.

Sadly, this is going to have some long term effects. Hence when I look at US stock markets and local level businesses it’s detached with 5-8 companies lifting the market up. I also feel we in the states will be getting hit with taxes and rate increases soon.

Yes this Pandemic will apparently impact humans to a certain level on the way we live..More than half of the Americans are asking to keep working from home even after the Pandemic.. just imagine the impact already..and some companies have come with new solutions to the work place where the 2 meters distance will be kept and open offices will be protected like grocery stores now with plastic dividers..HaHa.. these are small things.. let's not talk about the economies of nations already..

 

[HAIDER]

Eventually, they will open Hajj this year, due to dire financial conditions all among oil producing countries.

 

[BATMAN]

Eventually, they will open Hajj this year, due to dire financial conditions all among oil producing countries.

Or may be they decide to raise price of oil, instead of risking suicide!

 

[PakFactor]

Yes this Pandemic will apparently impact humans to a certain level on the way we live..More than half of the Americans are asking to keep working from home even after the Pandemic.. just imagine the impact already..and some companies have come with new solutions to the work place where the 2 meters distance will be kept and open offices will be protected like grocery stores now with plastic dividers..HaHa.. these are small things.. let's not talk about the economies of nations already..

Yes, the key thing would be to watch the real estate market, right now their is over 100 million square-foot of commercial retail space that is vacant in the United States alone; I wouldn't be surprised if this sector turns out to be like the housing market crash that happened in 2008-2009. Coupled this with personal debt it's a time bombing ready to explode.

Or may be they decide to raise price of oil, instead of risking suicide!

What good will that do? Their is an over supply of oil in the market at the moment, and no available storage space at the moment, with everything thing shut down and with people working from home oil isn't a commodity in demand at the moment.

Eventually, they will open Hajj this year, due to dire financial conditions all among oil producing countries.

I doubt they'll open Hajj -- to much risk at the moment.

 

[HAIDER]

Or may be they decide to raise price of oil, instead of risking suicide!

They can't. 11 Saudi super tanker waiting for off loading in US. No spot for those tankers next few months.

Yes, the key thing would be to watch the real estate market, right now their is over 100 million square-foot of commercial retail space that is vacant in the United States alone; I wouldn't be surprised if this sector turns out to be like the housing market crash that happened in 2008-2009. Coupled this with personal debt it's a time bombing ready to explode.



What good will that do? Their is an over supply of oil in the market at the moment, and no available storage space at the moment, with everything thing shut down and with people working from home oil isn't a commodity in demand at the moment.



I doubt they'll open Hajj -- to much risk at the moment.

They can't shut off oil wells. Its double cost, shutting down cost million and restart cost more then double the closing cost. So, oil price will see little raise but not much.

 

[BATMAN]

They can't. 11 Saudi super tanker waiting for off loading in US. No spot for those tankers next few months.

Well if you are sure of certain demise of KSA than shouldn't you be celebrating with comrades.

What good will that do? Their is an over supply of oil in the market at the moment, and no available storage space at the moment, with everything thing shut down and with people working from home oil isn't a commodity in demand at the moment.

Than some one need to educate Trump, who is desperate to raise oil prices, would that create space to off load?

 

[HAIDER]

Well if you are sure of certain demise of KSA than shouldn't you be celebrating with comrades.

All oil producing countries facing same problem, not just Saudis. Second biggest revenue is religious tourism for KSA. It's not question of celebration, these the facts and ground reality.Due to over pumping by Saudi, US shale production totally collapse.

Saudi Oil Stranded in Supertankers as Backlog Piles Up
OPEC is debating production cuts that would go beyond the historic oil pact they agreed to with the U.S. and Russia

Saudi Arabia’s oil-price war with Russia flooded the market with crude. Now, with demand having dried up and buyers hard to find, the kingdom is resorting to storing much of it at sea.

At least one in 10 supertankers around the world is serving as a floating oil storage facility, Saudi oil officials say. With many of those vessels filled with Saudi crude, stranded at sea without buyers, the world’s top oil exporter is trying to manage the repercussions of its monthlong price war with Russia.

...




TO READ THE

 

[BATMAN]

All oil producing countries facing same problem, not just Saudis. Second biggest revenue is religious tourism for KSA. It's not question of celebration, these the facts and ground reality.Due to over pumping by Saudi, US shale production totally collapse.

That was the plan behind reducing oil prices,,, few super tankers parked at any port is non issue for Saudis, they will get paid one way or the other.

Let's see how US react further. Thus far he has threatened to remove missile defense batteries, basically giving green signal to Iran for missile attacks and that is celebrating news for pdf.

 

[HAIDER]

That was the plan behind reducing oil prices,,, few super tankers parked at any port is non issue for Saudis, they will get paid one way or the other.

Let's see how US react further. Thus far he has threatened to remove missile defense batteries, basically giving green signal to Iran for missile attacks and that is celebrating news for pdf.

Iran and Saudis having back channel peace talks. Saudi spend too much money to keep sanctions on Iran. But, now peace talk is the only solution.

 

[Hack-Hook]

Well it's a wise move that must have been done ages ago . countries around persian gulf tend to rely on oil and forget more healthy way of balancing the budget.