Saudi Arabia recently increased Value-added Tax (VAT) to 15% which is three times its initial rate of 5%, which will come into effect from July 1st. The Kingdom has also suspended the cost of living allowances as of 1st June as a measure to support the country’s economy and increase the revenues amid the COVID-19 the pandemic. An unprecedented Sharp Decline in oil prices and non-oil revenues caused the kingdom to make the surprising decision. This decision of Saudi Arabia will prompt a discussion in the UAE and other neighboring GCC countries to increase the VAT rate in their respective countries.