SAUDI CIVIL SERVANTS GET RM1,000 A MONTH

King orders handouts after VAT implementation, hike in fuel prices

RIYADH where the kingdom is fighting a nearly three-year-old war.

Saudi Arabia, the world’s top oil exporter, roughly doubled gasoline prices on Monday as part of a broad reform aimed at diversifying its economy. A five per cent VAT on a broad range of goods and services came into effect on the same day.

The new payment orders were an acknowledgment of “the increased burdens for some segments of the population following from the necessary measures which the state took to restructure the economy”, according to the decree.

King Salman directed the state to bear the burden of VAT in some situations, including special health and education services as well as the first purchase of a house that is valued at up to 850,000 riyal ($226,660).

Allowances for students, retirees and social security recipients were also boosted.

The decree did not reveal the total cost of the new allowances, but it appeared to be considerably smaller than past handouts by Saudi kings, and therefore, unlikely to have much impact on economic growth or the state budget deficit.

About 1.18 million Saudis are employed in the government sector and there are more than 1.23 million pensioners and beneficiaries of pension payments, the central bank said.

That suggests a total package cost of about 23 billion riyal, according to calculations.

A package of handouts marking King Salman’s accession to the throne in early 2015 was estimated to cost more than 100 billion riyal. Reuters