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Saudi Arabia to impose VAT on 50% of products

Saudi Arabia to impose VAT on 50% of products
Implementation of VAT on 50% of commodities and services will shoot up inflation rate by 2.5%

Riyadh - Mubasher: Saudi Arabia’s inflation continued in the negative for the tenth month in a row, research firm Capital Economics said in a report on Tuesday, forecasting that inflation trajectory to change in the next year on the back of putting value-added tax (VAT) into effect and slashing subsidy.

Implementation of VAT on 50% of commodities and services will shoot up inflation rate by 2.5%, the report highlighted.

In October, food prices, which account for 20% of consumer price index, dropped 1.2% year-on-year.

The report mentioned that other price pressures remain weak; garments and furniture segments saw the lowest decline in 2004 and 2007, respectively.