VATLive > Blog > VAT > Saudi Arabia may cut VAT after COVID crisis

Saudi Arabia may cut VAT after COVID crisis

  • Nov 22, 2020 | Richard Asquith

The Saudi Arabian government has said it considering reversing the trebling of VAT from 5% to 15%. This would only happen once the coronavirus crisis is over. The aim would be to boost the economy which was hit by a sharp rise in the inflation rate to 6.1% after the rise in the consumption tax. The IMF estimated the country’s economy could shrink by over 5%, with a government budget deficit of $11 billion.

The VAT rate was hiked in July 2020. This was to help rebalance government revenues following the drop in oil prices. The state was the only country to introduce a VAT rise during the crisis – check Avalara’s COVID VAT measures tracker.

Saudi Arabia originally introduced VAT in 2018 as part of six-country Arab Gulf plan to create a VAT and Customs Union.


VP Global Indirect Tax
Richard Asquith
VP Global Indirect Tax Richard Asquith
Richard Asquith is VP Global Indirect Tax at Avalara, helping businesses understand their compliance obligations as they grow globally. He is part of the European leadership team which won International Tax Review's 2020 Tax Technology Firm of the Year. Richard trained as an accountant with KPMG in the UK, and went on to work in Hungary, Russia and France with EY.
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