ANKARA (AA): With Saudi Arabia announcing a threefold rise in thevalue-added tax (VAT), an expert believes the move may also make it moreexpensive for people to take the Umrah and Hajj pilgrimages.
“The Saudi economy has come under a double shock as a result of thecollapse of global crude oil prices and due to the measures taken to curbthe coronavirus outbreak,” Mohamed Ibrahim, Istanbul-based economic expert,told Anadolu Agency.
The measures also included suspending the cost-of-living allowance toaddress the negative impact of the coronavirus crisis.
Ibrahim said the measures will raise the costs of many items includingmaking Umrah and Hajj expensive.
“Saudi authorities may increase the Hajj and Umrah fees to help alleviatethe severity of the country’s budget deficit,” he added.
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According to official figures, pilgrimages bring revenue of $12 billion tothe Saudi kingdom every year. The religious rituals contribute to 20% ofthe non-oil GDP of the country, and around 7% of the total GDP.
Earlier, quoting Saudi Finance Minister Mohammed al-Jadaan, the officialSPA news agency said the VAT rates will stand increased from 5%-15% as ofJuly.
