RIYADH, 7 April — Minister of Finance and National Economy Dr. Ibrahim Al-Assaf announced yesterday that the government was planning to impose income tax on foreign companies and expatriate workers in the Kingdom.
“The Shoura Council is currently studying a new taxation system which stipulates a 30 percent tax on foreign companies and partners,” the minister told Asharq Al-Awsat after opening a symposium on BOT system.
Al-Assaf said the government was considering a tax rate of less than 30 percent on foreign workers. “The taxation on foreigners is important because there are individuals who have investments in the Kingdom,” he added.
The minister highlighted the new investment avenues opened by the “build, operate and transfer” (BOT) system to the private sector. He said the system offers private investors opportunities to finance infrastructure projects in the country.
The symposium is organized by the Ministry of Finance and National Economy in cooperation with the Islamic Development Bank (IDB) and the World Bank.
“Both the government and the private sectors are benefited by the BOT system. It opens up new avenues of investment for the private sector,” he added
Mansour Al-Maiman, secretary-general of the General Investment Fund, described the symposium as a first step toward promoting cooperation and coordination between the Finance Ministry, the IDB and the World Bank to facilitate financing of development projects in the Arab Gulf region.
Al-Maiman commended the new economic reforms adopted by the Saudi government to attract foreign investment. “The formation of a privatization committee under the patronage of the Supreme Economic Council is one of the major steps in this direction,” he added.
World Bank representative Edgar Saravia underlined the significance of the BOT system. “With the ever-growing demand for more and better infrastructure services today, BOT represents a very real alternative,” he said.
“It benefits all parties under a true public-private partnership in which government provides a sound policy and regulatory framework and the private sector provides financing and operating expertise for the delivery of these services,” he added.
“Governments benefit by being able to channel scarce resources for use in other sectors like education, health and social security, for which private capital is not yet readily available,” he noted.
