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

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

Expert Solution

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 -:

The govt withdrew $26.8 billion from its net foreign assets in March .
The govt has decided to cut its spending by $26 billion or 100 billion Saudi riyals.
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)
The govt will withdraw the cost of living allowance starting from June . These allowances held an annual cost $13.5 billion.
Increase in VAT (value added tax) from 5% to 15% as of july.

Rahul Sunny answered 7 months ago

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

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