Saudi Arabia to reconsider VAT when financial conditions improve, says Al-Jadaan

Saudi Minister of Finance Mohammed Al-Jadaan

Saudi Minister of Finance Mohammed Al-Jadaan said the Kingdom will reconsider the value-added tax (VAT) when the economic and financial conditions improve.

He added that the budget deficits for 2020 and 2021 reached SAR 294 billion and SAR 85 billion, respectively.

When a surplus is achieved in a year and does not cover the budget deficit, the withdrawals and the debt would force the government to borrow this surplus to cover the deficit and continue to provide services to citizens, Al-Jadaan said.

He added that the surplus should be used to support the government reserves, noting that the pandemic is still around.

Al-Jadaan indicated it was essential to ascertain that the government's financial position is strong to deal with any financial crises, adding that this policy should be followed in order to avoid taking tough measures when failing to absorb shocks, as seen over the past two years.