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Less than two weeks into 2018 and Saudi Arabia has already blown a hole in its plans to cut its deficit.
The country’s 2018 budget envisaged a $9.3bn fall in the country’s deficit to a still eye-watering $52bn (7.3% of GDP), with the gains slated to come in large part from an expected 39% increase in the kingdom’s tax take ( MEES, 22 December 2017 ).
Tax revenue was slated to rise by $12bn, thanks to the introduction of VAT at 5% from 1 January as well as a hike to road fuel and electricity prices ( MEES, 5 January ).
But, in the face of popular protest, Saudi Arabia is to counter the impact of the tax hikes with a “financial support package” for Saudi nationals working in the civil service and the military sector, as well as pensioners and students. (CONTINUED - 374 WORDS)