Speaking to reporters after opening a seminar in Riyadh, he said the oil-driven revenues would cover the higher spending ordered by Custodian of the Two Holy Mosques King Abdullah earlier this year for a series of welfare projects worth SR600 billion.
“The increase in income will cover the increase in spending,” Al-Eqtisadiah business daily quoted the minister as saying.
“Even as the global economy is going through some challenges, the Saudi economy is one of the few in the world that has healthy growth,” he added.
Saudi Arabia’s budget spending has more than doubled over the past decade to a record SR580 billion planned for 2011 before the announcement of the king’s handouts.
King Abdullah issued a series of decrees in February and March 2011, announcing plans to construct 500,000 new housing units in different parts of the Kingdom at a cost of SR250 billion, setting SR3,000 as minimum wage for Saudis, a two-month salary bonus for government workers and SR2,000 monthly unemployment allowance for Saudis.
The king increased the capital of the Real Estate Development Fund from SR10 billion to SR40 billion and the capital of Saudi Credit Bank from SR10 billion to SR30 billion.
The number of family members benefiting from social insurance has been increased from eight to 15, and SR1 billion allocated for the purpose.
He set aside SR3.5 billion to help the poor repair their houses and pay electricity and water bills and SR1.2 billion to conduct vocational training courses for women.
The Kingdom, which has accumulated a record $500 billion reserves thanks to robust oil prices, launched a five-year, $400 billion development plan in 2008, the biggest spending package relative to gross domestic product among the world’s top 20 developed nations, to upgrade infrastructure including airports and roads.
Al-Assaf earlier opened the 8th conference of the Union of Islamic Countries’ Taxation Authorities, which discussed a model agreement for the avoidance of double taxation among the Organization of Islamic Cooperation (OIC) countries.
“An efficient tax management system is required to increase public revenue and encourage investment,” Al-Assaf told the conference.
He highlighted the expertise gained by the Saudi Zakat and Revenue Department over the years and his ministry’s efforts to strengthen the department by applying modern technology.
Established in 2003, the union comprises of 26 OIC countries as members and seven countries as observers, said Ibrahim Al-Mefleh, director general of the Zakat and Revenue Department.
He said the annual conference would facilitate transfer of information and expertise between Muslim countries in the field, promote trade and investment between them and improve their tax management.
Al-Mefleh emphasized the importance of tax agreement between countries to facilitate movement of investments and goods.
Saudi Arabia has so far signed 28 such agreements while 29 are either on the way of signing or under negotiation, he pointed out.
