Saudi crown prince says kingdom has no plans to introduce income tax

[DUBAI] Saudi Arabia's Crown Prince Mohammed bin Salman said in televised remarks on Tuesday that the kingdom had no plans to introduce income tax and a decision last July to triple value-added tax to 15 per cent was temporary.

The kingdom had tripled VAT to offset the impact of lower oil revenue on state finances in a move that had shocked citizens and businesses expecting more support from the government during the coronavirus pandemic.

"Raising VAT was a painful measure and I hate to hurt any Saudi citizen, but it is my duty to build Saudis a long-term sustainable future," the prince said in an interview aired on Saudi TV to mark the fifth anniversary of Vision 2030.

"Raising VAT to 15 per cent is a temporary decision that will last one to five years and then it will go down to between 5 per cent to 10 per cent," he said.

Prince Mohammed also said the kingdom aims to reduce unemployment to 11 per cent this year. Unemployment among Saudi citizens fell to 12.6 per cent in the fourth quarter of 2020 from 14.9 per cent in the third quarter.

The government has been pushing through economic reforms since 2016 to create millions of jobs and reduce unemployment to 7 per cent by 2030.

The plans were disrupted by the coronavirus crisis that sent oil prices plummeting last year.

REUTERS