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Saudi king orders payouts, bonuses to soften price hikes

Saudi Arabia's King Salman has authorised a range of bonuses and payouts for citizens [Anadolu]

Date of publication: 6 January, 2018

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King Salman ordered a monthly payment to state employees over the next year in compensation for rising cost of living, after the government hiked domestic gas prices and introduced VAT.
Saudi Arabia's King Salman has authorised a range of bonuses and payouts for citizens, including a monthly payment of 1,000 riyals ($267) for civil servants for the coming year just days after a new tax was introduced and subsidies were lifted on gasoline.

The government said the measures are meant to "ease the burdens" of price hikes on citizens as the state works to restructure its economy amid lower oil prices.

In a series of royal decrees issued overnight on Saturday, the king ordered a 5,000 riyal ($1,333) payout to military personnel serving on the frontlines of the kingdom’s war with Yemen, as well as a 500 riyal ($133) allowance for one year for retirees and those receiving social security.

Students' monthly stipends will be boosted this year and the government will bear the cost of the new tax for some services, and for the purchase of a first home valued at up to 850,000 riyals ($226,600).

The king also ordered that government salaries be paid before electricity bills are issued each month.

On January 1, the government introduced a five percent value-added tax on goods and services, raised the price of electricity and reduced subsidies on gasoline, nearly doubling the price at the pump.

A Twitter hashtag this week garnered thousands of tweets complaining that salaries are not enough to cover the cost of living.

A similar hashtag a few years ago prompted the government to reverse a freeze on bonuses and government perks.

Saudis opposed to the freeze had pointed to other energy-rich Gulf countries - like the United Arab Emirates and Qatar - where government salaries are much higher.

The government recently instituted a new welfare system reaching approximately three million families and 10.6 million beneficiaries - or roughly half the Saudi population.

Half of those families received the maximum payment of 938 riyals ($250). The minimum payment is 300 riyals ($80).

The government expects to pay approximately 32 billion riyals ($8.5 billion) on the Citizen's Account payments in 2018.

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