Saudi Arabia will triple value added tax and suspend a cost of living allowance for state workers, Reuters reported referring to the state news agency.

“The cost of living allowance will be suspended as of June 1, and the value added tax will be increased to 15% from 5% as of July 1,” said Finance Minister Mohammed al-Jadaan. 

“These measures are painful but necessary to maintain financial and economic stability over the medium to long term...and to overcome the unprecedented coronavirus crisis with the least damage possible,” he added in a statement.

The economy of the world's largest oil exporter has been hit by falling energy demand and the global crisis amid the COVID-19 pandemic. According to the latest data, Saudi Arabia has over 37 thousand COVID-19 cases, while 239 people died.

On May 8, US President Donald Trump and King of Saudi Arabia Salman Ben Abdel Aziz Al Saud held a phone talk and discussed the world oil market.

The OPEC + agreement on the limitation of oil production came into force on May 1. According to it, the reduction will amount to 9.7 million barrels per day in the first two months.