IMF: Saudi Arabia should consider raising VAT to 10%

Saudi Arabia should consider raising a value added tax (VAT) to 10% from the current 5%, the International Monetary Fund (IMF) said, stressing the importance for the world’s top oil exporter to improve its fiscal position amid lower crude prices.

Saudi Arabia introduced a 5% VAT in January 2018 to improve non-oil revenue generation after a plunge in oil prices from mid-2014 bruised its revenues.

As part of a series of fiscal consolidation measures, the IMF “suggested that consideration be given to raising the VAT rate from 5 to 10 percent” in consultation with the Gulf Cooperation Council bloc which agreed introduction of VAT.