Saudi women walk past a jewelry shop at Tiba market in Riyadh, on October 3, 2016. Since 2014 global oil prices have collapsed by more than half, leaving Saudi Arabia with a record deficit last year. AFP / FAYEZ NURELDINE
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Saudi Arabia and the United Arab Emirates introduced value-added tax from Monday, a first for the Gulf, which has long prided itself on its tax-free, cradle-to-grave welfare system. Saudi Arabia compounded the New Year blow for motorists with an unannounced hike of up to 127 percent in gasoline prices with immediate effect from midnight.They are the latest in a series of measures introduced by Gulf oil producers over the past two years to boost revenues and cut spending as a persistent slump in world prices has led to ballooning budget deficits.The hike in fuel duty in Saudi Arabia was the second in two years.The introduction of VAT coupled with the increase in fuel duty is expected to bring an abrupt end to a year of negative inflation in Saudi Arabia.
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