Hajj and Umrah Pilgrimages to become more costly with new steps taken by the Saudi Arabia government

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Hajj and Umrah Pilgrimages to become more costly with new steps taken by the Saudi Arabia government

ANKARA (AA): With Saudi Arabia announcing a threefold rise in the value-added tax (VAT), an expert believes the move may also make it more expensive for people to take the Umrah and Hajj pilgrimages.

“The Saudi economy has come under a double shock as a result of the collapse of global crude oil prices and due to the measures taken to curb the coronavirus outbreak,” Mohamed Ibrahim, Istanbul-based economic expert, told Anadolu Agency.

The measures also included suspending the cost-of-living allowance to address the negative impact of the coronavirus crisis.

Ibrahim said the measures will raise the costs of many items including making Umrah and Hajj expensive.

“Saudi authorities may increase the Hajj and Umrah fees to help alleviate the severity of the country’s budget deficit,” he added.

According to official figures, pilgrimages bring revenue of $12 billion to the Saudi kingdom every year. The religious rituals contribute to 20% of the non-oil GDP of the country, and around 7% of the total GDP.

Earlier, quoting Saudi Finance Minister Mohammed al-Jadaan, the official SPA news agency said the VAT rates will stand increased from 5%-15% as of July.