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[JEDDAH] Saudi Arabia plans to more than triple the government's non-oil revenues and clamp down on public sector salaries over the next five years, ministers said on Monday as they described reforms designed to reduce the economy's dependence on oil.
The National Transformation Plan (NTP) aims to boost the state's non-oil revenue to 530 billion riyals (S$191 billion) by 2020, documents distributed to reporters in Jeddah showed.
The NTP, which includes over 500 projects and initiatives as well as performance indicators for ministries and other government agencies, will cost around 270 billion riyals to implement, the document showed.
The plan is part of a wider, long-term reform drive known as Vision 2030, which was announced by Deputy Crown Prince Mohammed bin Salman in April. He aims to overhaul many aspects of Saudi Arabia's economy and society as the kingdom prepares for a future of shrunken oil revenues and a rising population.
The finances of the world's top oil exporter have been hit hard since the summer of 2014, when crude prices plunged, producing a state budget deficit of nearly US$100 billion last year.
Under the NTP, new non-oil revenue is expected to come from the introduction of a value-added tax (VAT), so-called "sin taxes" on sweet drinks and tobacco, and additional fees imposed on the private sector.
The government will strive to reduce the value of public salaries and wages as a proportion of the budget to 40 per cent from 45 per cent by 2020, and cut water and electricity subsidies by 200 billion riyals.
The energy ministry aims to maintain its oil production capacity at 12.5 million barrels a day while raising its gas output capacity to 17.8 billion standard cubic feet a day from 12 billion, the document said.