Saudi cabinet approves land tax, foreign investment rules: report

[DUBAI] Saudi Arabia's cabinet approved a tax on undeveloped urban land and rules allowing foreign investors to own 100 per cent of retail and wholesale businesses, the official SPA news agency said on Monday.

The 2.5 per cent annual tax on the value of undeveloped land designated for residential or commercial use will be applied in stages to owners of plots exceeding 5,000 square metres, SPA quoted a cabinet statement as saying.

The measure aims to help resolve a shortage of affordable housing in Saudi Arabia by putting more unused land on the market where it can be acquired by developers.

The cabinet also approved rules, originally announced last September, permitting full foreign ownership of retail and wholesale operations. Previously, the country's ownership ceiling was set at 75 per cent.

Saudi Arabia is keen to attract more foreign investment to help its economy cope with low oil prices, which have slashed state revenues.

Possible US investments in Saudi Arabia are expected to be discussed during a visit to the United States this week by Saudi Arabia's Deputy Crown Prince Mohammed bin Salman and senior Saudi economic officials.

REUTERS