Saudi to discuss land tax, MSCI inclusion

DUBAI, Oct 29, (RTRS): Saudi Arabia’s Shura Council plans to meet on Monday to discuss imposing a tax on undeveloped land, the official Saudi Press Agency reported on Thursday.

The body advises the government on legislation. SPA did not give any details.

Earlier this month the housing minister said the cabinet had submitted a proposal to the council to impose a fee of no more than 100 riyals ($26.67) per square metre on undeveloped land, and that the council was expected to complete its study of the proposal within 30 days.

SPA also said the council would discuss a report by the stock market regulator on trying to have the Saudi market join MSCI’s emerging markets index.

The council’s financial committee has “recommended expediting and finalising the necessary requirements to list Saudi stocks in MSCI’s emerging markets index”, SPA said.

It did not elaborate on the requirements, and MSCI has indicated that any entry into its index, if it happens, would not occur before 2017.

Meanwhile, net foreign assets at Saudi Arabia’s central bank fell 1.2 percent from the previous month in September to 2.426 trillion riyals ($647 billion), their lowest level since November 2012, official data showed on Thursday.

The central bank, which serves as Saudi Arabia’s sovereign wealth fund, has been liquidating assets to cover a huge state budget deficit caused by low oil prices, which have slashed the earnings of the world’s top oil exporter.

The assets shrank 12.2 percent from a year earlier. They reached a record high of $737 billion in August last year before starting to dwindle.

The pace of decline has slowed since early this year, however, when month-on-month falls sometimes exceeded 2 percent. One reason for the slower fall is that the government resumed issuing domestic bonds in July for the first time since 2007, reducing the need to sell assets abroad.

The drop may slow further in coming months as the government takes austerity steps to restrain spending and raise more revenue from non-oil sources.