Saudi Arabia has implemented several measures to mitigate the impact of the coronavirus pandemic on its economy and shield its public finances.
Those measures include a 100 billion riyals ($26.6 billion) spending cut, tripling VAT, suspending cost of living allowance and raising the debt ceiling to 50 percent of gross domestic product (GDP).
Here is a list of some of the major fiscal and economic measures the Kingdom announced.
Initiatives for the private sector
• Extending the grace period and rescheduling loans for companies struggling with loans and payments amounting to more than 6 billion riyals.
• Providing 1 billion riyals worth of direct and indirect loans to finance working capital.
• Allocating 4 billion riyals to provide employment support and training programs that will allow more than 300,000 beneficiaries to work in the private sector.
• One billion riyals going to help private sector employees who have not previously benefited from the support programs available.
• Allocation of 4 billion riyals to provide social loans to low-income families during 2020, with 100,000 Saudi citizens set to benefit.
• Increasing the direct lending portfolio for micro and small enterprises to 2 billion riyals, set to help 6,000 male and female entrepreneurs.
• Allocation of a portfolio worth 2 billion riyals to provide financing support to small- and medium-size health facilities, with 1,000 existing health facilities benefitting from the funds.
• Allocation of 2 billion riyals to finance indirect lending programs through financial institutions.
The Ministry of Finance has allocated 120 billion riyals for private sector support in the following areas:
• Submission and payment of the following for commercial businesses are postponed for a period of 3 months:
• Submission of tax declarations and payment of selective taxes owed.
• Submission of VAT declarations and payment of VAT owed.
• Supply of declarations, payment of income tax and payment of their obligations.
• Submission of zakat returns, and payment of zakat owed.
• Payment of the fees due by some government services and municipal fees.
• Collection of import duties (bank guarantee required).
• Payment of some commercial businesses are postponed for a period of 9 months.
• Expansion of financing supporting target economic sectors, which includes deploying working capital.
• Expatriates whose residency permit ends from the end of March 2020 to the end of June 2020 are exempted from the allowances and considerations above.
The Human Resources Development Fund is providing 5.3 billion riyals worth of support to help private sector businesses employ and train Saudis citizens.
Funding covers the following areas:
• Employment support worth 2 billion riyals: Supporting 100,000 job seekers in the private sector, in addition to offering and activating remote working tools, as alternative options to regular working environments.
• Training support worth 800 million riyals: Allocated to 100,000 beneficiaries to provide greater access to training and development opportunities.
• 1.5 billion riyals going to support job seekers.
• Private Sector Employees Support Path worth 1 billion riyals: To support private sector employees who were recruited from the beginning of July 1, 2019, who were not previously supported by the Fund’s support and empowerment programs.