RIYADH, 27 October — The government has no plans to levy taxes on Saudis as proposed by the IMF despite a chronic budget deficit for the past two decades, Al-Eqtissadiyah newspaper quoted Finance Minister Ibrahim Al-Assaf as saying yesterday.
“There is no plan to impose taxes on citizens and the government is not even considering this issue at present,” Al-Assaf told the business daily.
The International Monetary Fund (IMF) in a report on the Saudi economy released on Friday, called on the Kingdom to accelerate the introduction of taxes on foreigners and consider taxing nationals.
Al-Assaf said a draft bill to impose taxes on expatriate workers was still being considered by the Shoura Council, which provisionally approved the move in May. The draft, stipulating a 10 percent income tax on foreigners drawing more than $1,000 a month, will go back to the consultative council for final approval before it is referred to the Cabinet for endorsement.
Some IMF directors, who prepared the report, suggested that the “introduction of sales tax might be useful as an interim measure pending the implementation of the Value Added Tax.”
The IMF commended the Saudi authorities for their “skilful and consistent pursuit over the past several years of comprehensive ... structural reforms and sound macroeconomic policies.” The report welcomed Saudi “plans to gradually achieve budget balance or a small surplus by 2005” and recommended “these plans be implemented as part of an overall medium-term strategy.”
