Government stresses that economic reforms are proceeding as planned and it is determined to reach its goal with minimal damage to lower income citizens
RIYADH, January 5 (CIC) – King Salman bin Abdulaziz of Saudi Arabia issued a Royal Order late on Friday that introduced a number of additional measures to be taken by the government with the aim of softening the impact of economic reforms on Saudi households.
The Royal Order aims to reduce the burden of economic reforms that will see gasoline and electricity prices increase and the introduction of a value-added tax (VAT) as of January 1, 2018. The Saudi government stressed that economic reforms are proceeding as planned, but it is also determined to minimize the impact on lower income citizens, especially.
The King said he was issuing the Royal Order in light of information that Crown Prince Mohammed bin Salman “presented to us regarding the increase in the cost of living on some segments of our population as a result of the necessary measures taken by the State to restructure the economy, and our desire to alleviate the burden of our sons and daughters.”
The Royal Order stipulated that payment of the annual bonus to Saudi public sector employees and members of the military for the current fiscal year 1439/1440 Hijri effective January 1, 2018. A monthly cost of living allowance of 1,000 Saudi riyals shall be paid for a period of one year to citizens who are civic or military employees.
Also ordered was a bonus of 5,000 riyals for military personnel serving at the Kingdom’s southern frontline.
The King also ordered the addition of a cost of living allowance of 500 riyals for one year to be paid to Saudi citizens who are beneficiaries of pensions paid by the Public Pension Agency and the General Organization for Social Insurance. The Royal Order also stipulated the addition of a cost of living allowance of 500 riyals to the monthly allowance for social security beneficiaries for one year, provided that this allowance is not combined with the aforementioned allowance.
Also ordered was a one-year 10% increase in the stipend payments for male and female Saudi students.
The government also will cover VAT for citizens benefiting from special healthcare services and special communal education.
The State will bear value-added tax (VAT) instead of citizens benefiting from private health services and private education. It will also cover up to 850,000 riyals of the VAT on citizens’ first home purchase, the Order said.
“This Order is to be delivered to all relevant authorities for implementation,” the King said.
Separately, the official Saudi Press Agency also reported that King Salman issued a directive to unify the payment of the salaries of civil servants on the 27th day of every month, according to the Gregorian calendar, as well as the standardization of utility bills to be issued the week that follows salary payments.