The Saudi consultative council (majlis al-shura) is currently reviewing a new tax law that would lower the corporate tax levied on foreign firms operating in the kingdom from 45 to 30 percent, Secretary General of the Supreme Economic Council (SEC) Abdulrahman Al-Tuwaijri told a press conference in Dubai this week.
Nonetheless, the oil-rich kingdom is not yet considering introducing a general income tax, neither does it plan to raise the duties levied from Saudi firms or individuals, who are presently required to pay only the Islamic Zakat alms—amounting to 2.5 percent of the annual income, reported Sibexlink.
Economists have urged the Saudi government to consider gradual taxation, starting with corporate taxation, due to the high political sensitivity related to the introduction of a general income tax.
The introduction of a new taxing system is considered part of the government efforts to stimulate the country’s economy by encouraging direct foreign investments. It is hoped that such steps would diversify the Saudi sources of income and reduce dependence on oil. The Saudi government similarly seeks to push forward the privatization state-owned monopolies, including the Saudi Telecommunications Company and Saudi Arabian Airlines. — (menareport.com)
© 2002 Mena Report (www.menareport.com )