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Saudi Arabia is going to the rate of the value added tax (VAT) it on goods and services. VAT will from 5 per cent to 15 per cent on the 1st of July. The tax was in Saudi Arabia for the first time in 2018. Government authorities this drastic measure is necessary to the effects of the coronavirus pandemic on the economy. The cut also part of wider austerity measures to help the economy. Finances of the oil-rich nation have been badly as the pandemic has seen oil prices and demand for oil plummet. Analysts are that oil revenues this year have fallen by almost a quarter when to the same period last year.

Another measure the finance ministry has in a bid to up the economy is the suspension of a cost of living allowance. This is a payment of about $256 per month to state employees. It was introduced to help rising prices and more expensive petrol at the pump. Saudi's Finance Minister said: "These measures painful but necessary to financial and economic stability over the medium to long term...and to the unprecedented coronavirus crisis with the least damage possible." A Gulf expert : "The move will consumption and could also the expected revenues. These pro-austerity and pro-revenue moves rather than pro-growth ones."