Saudi Arabia to raise VAT from 5% to 15% from July 1 – Reuters

According to Reuters, Saudi Arabia announced that it will raise its consumption tax (Value Added Tax - VAT) from 5% 50 15%, with effect from July 1.

This comes as the country battles with the coronavirus impact on the economy as well as the recent oil-price slump.

The Kingdom said, “low oil demand, low oil prices, coronavirus impact along with unplanned expenditure on the health sector has pressured the state finances.”

Market reaction

The above piece of news has little to no impact on the risk sentiment, as the mood remains upbeat starting out the week despite the renewed trade tensions lurking between China and Australia.

USD/JPY challenges highs near 107.00 while the AUD/USD trades well bid around 0.6550. The US oil drops over 2% to near the 24.00 region.