Saudi citizens would not pay taxes on income and Saudi companies would not see their profits taxed with economic reforms being introduced in the Kingdom, Saudi Arabia’s finance minister Dr. Mohammed Al-Jadaan said on Sunday, Reuters reports.
Reuters reports that Al-Jadaan sought in a statement carried by state news agency SPA to “allay concern” that people would be taxed. Saudis currently do not pay any income tax, nor are Saudi companies taxed on their profits. He also said a 5% value-added tax planned for 2018 would “not be raised above 5 percent before 2020.”
The 5% VAT will apply to certain goods following a GCC agreement last June. The move follows an International Monetary Fund (IMF) recommendation for Gulf states to impose revenue-raising measures including excise and value added taxes to help their adjustment to lower crude oil prices, which have slowed regional growth.
VATs are employed in over 150 countries worldwide, and typical rates range between 5%-25%.
