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Sun 18 Sep 2016 11:40 AM

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Saudi Arabia to remove subsidies for 7 services

The changes include removing tariff protection for 193 items

Saudi Arabia to remove subsidies for 7 services
The King Abdullah financial district is seen illuminated at night in Riyadh, Saudi Arabia, on Monday, April 9, 2012. Saudi Arabias gross domestic product expanded 6.64 percent in the fourth quarter from a year ago, the kingdoms statistics agency said. (Bloomberg)

Saudi Arabia will cut subsidies for seven government services, including removing price-caps on 193 items, according to local media.

Effective from October 2, the 50 percent subsidy that has for years applied to port services, passport fees, car driving license fees, car transfer fees, traffic fines and renewal of residence permits for domestic workers will be removed, while the protection tariffs added to 193 imported items will be removed, Arab News said.

The kingdom is making substantial cuts to state spending to help cope with the prolonged decrease in oil revenues.

In August, the Cabinet approved new charges for municipal services and raised fees for visa and traffic violations in response to orders by the Ministries of Finance, Economy and Planning to boost state revenues.

Under the new charges, a visit visa will cost SR2,000 ($533). However, first-time Umrah pilgrims have been exempt.

A six-month multiple-entry visa will cost SR3,000 ($799), 12-month visa SR5,000 ($1,322) and 24-month visa SR8,000 ($2,132). A transit visa will cost SR300 ($80).

telcoguy 3 years ago

let's see how this move goes down with the population. Interesting times ahead

SA1 3 years ago

They will accommodate. In the age of internet people are much aware of global issues and the economic situation.

Skeptic 3 years ago

So are they "removing subsidies" or just doubling the cost of all of these services?

Telcoguy 3 years ago

@SA1 I hope so, but removing subsidies is always tricky for any government.
@Skeptic I am not sure I follow you here... They are increasing the price of a number of government services, hard to make a distinction between a price increase and a subsidy reduction. I would assume that these services have a fairly inelastic demand, so the effect will be increased government revenue.
More interesting is what happens with the 193 products, are they removing price caps or reducing protectionist subsidies, or both?
If the first we should expect decreased demand (plus reduced subsidy), so we should expect substantial savings.
If they are reducing tariffs this would mean lower consumer prices and less government revenue...
Oh well, I will find out somewhere else, maybe AB should hire some journalists with a little bit of an education in economy

Anonymous 3 years ago

Disgraceful move by the state to implement Umrah Visa fees of SAR2000, impacted many worshippers as they will be restricted from performing act of worship, and turn the religion matters in to business, no decency. They did not even have a single bit of shame to even think about imposing fees on pilgrims, they should be ashamed of themselves before the curse get inflicted upon them. Many people (who are not even rich) strive hard to go on Umrah and the State is just adding misery to our hard work.