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Saudi Arabia gives handout to compensate for new tax | Saudi Arabia gives handout to compensate for new tax |
(about 13 hours later) | |
State employees in Saudi Arabia are to be given money to compensate for a new sales tax and a rise in fuel prices. | State employees in Saudi Arabia are to be given money to compensate for a new sales tax and a rise in fuel prices. |
King Salman has ordered monthly payments of more than $260 (£190) for the next year. | King Salman has ordered monthly payments of more than $260 (£190) for the next year. |
The kingdom has roughly doubled domestic petrol prices and introduced a 5% tax on most goods and services, including food and utility bills. | The kingdom has roughly doubled domestic petrol prices and introduced a 5% tax on most goods and services, including food and utility bills. |
The Saudi government wants to reduce its dependence on oil following recent turbulence in the crude oil market. | The Saudi government wants to reduce its dependence on oil following recent turbulence in the crude oil market. |
The United Arab Emirates (UAE) has also introduced a 5% sales tax. | The United Arab Emirates (UAE) has also introduced a 5% sales tax. |
The Saudi royal decree says citizens using private health and educations services will be exempt and the state will also pay tax on their first home purchase. | The Saudi royal decree says citizens using private health and educations services will be exempt and the state will also pay tax on their first home purchase. |
It also says military personnel serving on the front lines with Yemen will also receive a one-off payment of more than $1,000. | It also says military personnel serving on the front lines with Yemen will also receive a one-off payment of more than $1,000. |
Organisations such as the International Monetary Fund have long called for Gulf countries to diversify their sources of income away from oil reserves. | Organisations such as the International Monetary Fund have long called for Gulf countries to diversify their sources of income away from oil reserves. |
In Saudi Arabia more than 90% of budget revenues come from the oil industry while in the UAE it is roughly 80%. | In Saudi Arabia more than 90% of budget revenues come from the oil industry while in the UAE it is roughly 80%. |
In 2016 Saudi Arabia announced it was cutting public sector pay to bring down spending, but last year reversed the cuts. | In 2016 Saudi Arabia announced it was cutting public sector pay to bring down spending, but last year reversed the cuts. |
About two-thirds of working Saudis are employed in the public sector. Their salaries and allowances accounted for 45% of government spending in 2015 and contributed towards a record deficit. | About two-thirds of working Saudis are employed in the public sector. Their salaries and allowances accounted for 45% of government spending in 2015 and contributed towards a record deficit. |
Saudi Arabia and the UAE have already taken other steps to boost government coffers. | Saudi Arabia and the UAE have already taken other steps to boost government coffers. |
In Saudi Arabia this included a tax on tobacco and soft drinks as well as a cut in some subsidies offered to locals. In the UAE a tourism tax has been introduced. |
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