Specialists imagine that Umrah and Hajj pilgrimages are set to be costlier for individuals as Saudi Arabia has introduced a threefold improve within the value-added tax (VAT).
Istanbul-based financial knowledgeable, Mohamed Ibrahim, stated, “The Saudi economic system has come beneath a double shock because of the collapse of world crude oil costs and because of the measures taken to curb the coronavirus outbreak.”
The steps additionally embrace stopping the cost-of-living allowance to fulfill the detrimental impression of the coronavirus.
Ibrahim stated these steps will improve the price of a number of issues corresponding to Umrah and Hajj. He added, “Saudi authorities might improve the Hajj and Umrah charges to assist alleviate the severity of the nation’s funds deficit.”
As per the official figures, pilgrimages account for greater than $12 billion in income for the Saudi kingdom yearly. They contribute round 20% to the non-oil GDP of the nation, and round 7% to the full GDP.
Earlier, Mohammed al-Jadaan, Saudi Finance Minister, advised the official SPA information company that the VAT charges shall be elevated from 5% to 15% as of July. Ibrahim stated, “The Saudi funds banks closely on oil revenues, because the oil costs collapse tremendously affected public revenues and led to a excessive funds deficit.”
He added that KSA had been options to falling oil revenues. “These options included austerity measures taken to cut back public expenditures, in addition to the tendency to extend public revenues by elevating the VAT together with halting to pay the price of residing allowance,” he famous.
The Saudi minister described the measures as “essential to defend the dominion’s economic system to beat the unprecedented world coronavirus pandemic and its monetary and financial repercussions with the least injury attainable”.