Question

1. Discuss government steps taken in COVID19 to maintain Revenues of Arabia budget 2020.

Answer 1

The Saudi Arab (Arabian ) govt has witnessed a deep plunge in the revenue due to corona virus pandemic . The contagious virus (COVID-19) HAS FORCED THE COUNTRIES TO GO FOR GLOBAL LOCKDOWNS WHICH HAS decreased the footfall of pilgrims to Mecca and Medina leading to loss of revenue . Also the country had been largely dependent on oil for revenue but due to the worldwide shutdown , the fall in demand of oil has crashed the oil prices further worsening the level of revenue. The state revenue has decraesed by 22% in the first quarter as compared to last year. The oil revenues has received a setback of 24% and the budget deficit has reached $9 billion or 34 billion riyals.

The steps taken by Arabian Govt to maintain the revenue of Arabia as follows -:

1. The govt withdrew $26.8 billion from its net foreign assets in March .
2. The govt has decided to cut its spending by $26 billion or 100 billion Saudi riyals.
3. The govt has decided to cancel or postpone some capital expenditures for the projects of VISION 2030 ( an AMBITIOUS and central plan of Crown Prince Mohammad bin Salman)
4. The govt will withdraw the cost of living allowance starting from June . These allowances held an annual cost $13.5 billion.
5. Increase in VAT (value added tax) from 5% to 15% as of july.