Saudi Arabia's finance minister, Mohammed Al Jadaan, said the value-added tax of 5 percent, that is expected to be implemented in 2018, will not be raised above that level before 2020 and no decisions will be implemented retroactively.
In statements carried by state-run news agency, SPA, he also said he will not impose income tax on citizens nor will Saudi companies see their profits taxed.
He said to achieve the targets of Saudi Vision 2030 requires the non-oil private sector to grow at 8.5 percent per annum and the sector’s gross domestic product (GDP) to grow by SAR 1.6 trillion. The private sector is expected to receive SAR 200 billion in financial packages over the next four years, he added.
Al Jadaan also indicted that payments owed to contractors and suppliers will be settled within 60 days.
The collapse in oil prices after mid-2014 has pushed Saudi Arabia to consider radical overhaul of all parts of its economy, including new taxes, privatizations, a changed investment strategy and sharp cuts in government spending.
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