Saudi Arabia will increase its value-added tax (VAT) from five to 15 per cent in July, as part of moves to support the economy amid the novel Coronavirus pandemic, the Finance Ministry said on Monday.

The kingdom, starting in June, would suspend its cost of living allowance, a bonus King Salman ordered two years ago for state and military employees.

Finance Minister Mohammed al-Jadaan said that the pandemic had caused a decline in revenues, thus requiring the government to cut expenditures and introduce measures to support stability of non-oil revenues.

“The measures are painful but necessary,” al-Jadaan said in a