Saudi Arabia Could Introduce Income Tax, Sell Assets To Revive Economy

Lower crude oil prices and the COVID-19 outbreak has hurt the Saudi Arabian economy and the kingdom is now considering various options, including income tax and sale of state assets to boost income, a Bloomberg report said.

The kingdom could raise more than 50 billion riyals ($13.3 billion) over the next four to five years by privatizing assets in the education, health-care and water sectors, said Finance Minister Mohammed Al Jadaan on Wednesday during a virtual forum organized by Bloomberg.

A Bloomberg report quoted Al Jadaan saying that the Saudi Arabian government is "considering all options" to bolster its finances and while income tax isn't "imminent" and "would require a lot of time" to prepare, the kingdom "isn't ruling anything away for now."

However, the state-run Saudi Press Agency reported citing an unidentified official source as saying that income tax had not been discussed in the cabinet or any of the government councils or committees.

According to IMF (International Monetary Fund), the world's biggest oil exporter's economy is set to shrink 6.8 percent this year, its deepest contraction in over 30 years.

The government has already taken measures to support its finances, including tripling value-added tax (VAT), increasing import fees, and canceling some benefits for government workers. The kingdom has traditionally been tax-free for individuals as oil revenue has supported a wide range of subsidies and benefits for citizens.