‘No income tax for Saudi citizens’

Saudi Arabia’s finance minister said Sunday citizens would not pay taxes on income and Saudi companies would not see their profits taxed under sweeping economic reforms being introduced in the oilrich kingdom.

The collapse in oil prices after mid-2014 has pushed Saudi Arabia to contemplate a radical overhaul of all parts of its economy, including new taxes, privatisations, a changed investment strategy and sharp cuts in government spending.

Concerns allayed

Mohammad Al-Jadaan sought in a statement carried by state news agency SPA to allay concern that people would be taxed as part of the ambitious reform plan. Saudis currently do not pay any income tax, nor are Saudi companies taxed on their profits.

He also said a valueadded tax planned for 2018 would “not be raised above 5 per cent before 2020”.

The six Gulf Cooperation Council (GCC) countries are aiming to introduce a 5 per cent value-added tax at the start of next year to raise non-oil revenues. But economists and officials in some countries have said privately that simultaneous introduction in all countries may not be feasible.