The Kingdom of Saudi Arabia (KSA) will reconsider value-added tax (VAT) after it has achieved certain objectives related to its economy and economic growth, a senior official has said.
Mohammed Al Jadaan, Saudi Arabia’s Minister of Finance, said increasing VAT to 15 per cent was the best decision among the tough choices that the government had to make last year.
“Saudi Arabia will reconsider the value-added tax upon achieving certain objectives, such as the Kingdom’s gross domestic product growth, economic broadening, and a steady rise in oil price,” Al Jadaan said, according to the Saudi Gazette.
KSA increased VAT from five per cent to 15 per cent from July 1, 2020. This decision was taken by the Saudi government in response to the economic impact of Covid-19 and the decline in revenues from lower oil prices.
He affirmed that taxes are an essential part of non-oil-dependent countries, indicating that the government's goal is to expand the economy to reduce the economic burden, whether in fees or taxes, off the shoulders of their nationals or the private sector.
Al Jadaan also stated that the levels of public debt to the gross domestic product (GDP) are in the range of 30 to 33 per cent, which is a very reasonable percentage compared to G-20 countries.
The Saudi finance minister said the government is focusing on reducing the unemployment rate, increasing the purchasing power of its nationals, and providing an environment that enables young men and women to start their own businesses.
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