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No income tax on individuals, says Saudi finance minister

Finance minister Mohammed Al-Jadaan said that $12bn bond proceeds will cover the deficit and accelerate spending on major projects

Saudi Arabia has no plans to impose an income tax on individuals, the country’s finance minister has confirmed.

“There is no intention at all in Saudi Arabia to impose income tax on individuals. That has been our position very clearly,” Mohammed Al-Jadaan told Bloomberg TV at the World Economic Forum held in Davos.

The minister said that the kingdom is trying to “rationalise some of the burden” on the economy to make it even more business friendly. 

Saudi Arabia earlier this month sold $12 billion of bonds in a three-part issuance that was heavily oversubscribed. The kingdom sold bond tranches of $3.25 billion, $4 billion and $4.75 billion for six, 10 and 30 years, respectively.

Al-Jadaan disclosed that the bond proceeds will cover the deficit and accelerate spending on significant projects. 

“We have to finance the deficit that reaches two percent of GDP. We have logistics projects such as ports, airports, water treatment plants, and renewables. We need the financing for these projects.”

The minister clarified that “efficiency and economic value” were the main factors behind slowing some Vision 2030 projects.

“We want to make sure that every dollar we spend does not leak. This means that you don’t need to import too much for your own development but rather for the development of your economy,” he added.

In December 2023, Saudi Arabia announced offering a 30-year corporate income tax exemption to foreign companies that locate their regional headquarters to the kingdom.

The tax exemption package under the regional headquarters (RHQ) programme includes a zero percent rate for corporate income tax and withholding tax related to approved activities for 30 years.

In 2021, the government set a target of January 1, 2024, for companies to set up in the kingdom, the world’s top oil exporter, to gain access to government contracts worth SAR1 million ($266,000) or more.

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