No plans for income tax, VAT increase is temporary: Saudi Crown Prince Mohammed bin Salman

The crown prince revealed that the Kingdom is in discussions to sell 1 percent of state oil firm Saudi Aramco to a leading global energy company. (Reuters)
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Updated 28 April 2021
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No plans for income tax, VAT increase is temporary: Saudi Crown Prince Mohammed bin Salman

  • Crown Prince touched on a wide range of topics during appearance on Liwan Al Mudaifer Show on Rotana Khalijiya TV
  • He tallied the achievements of Vision 2030 to date and outlined what would come in the next phase of implementation

RIYADH: In a wide-ranging TV interview to mark the fifth anniversary of the Saudi Vision 2030 strategy, Crown Prince Mohammed bin Salman has identified increasing home ownership and falling unemployment as two signal achievements, ruled out introduction of income tax and described the current 15 percent value-added tax (VAT) as a temporary measure.

He also revealed that the Kingdom is in discussions to sell 1 percent of state oil firm Saudi Aramco to a leading global energy company. Aramco previously sold a sliver of its shares on the Saudi bourse in December 2019, generating $29.4 billion in the world's biggest initial public offering.

Appearing as a guest on the Liwan Al-Mudaifer Show late on Tuesday, presented by Saudi host Abdullah Al-Mudaifer and broadcast on Rotana Khalijiya TV and state media, the crown prince tallied the achievements of Vision 2030 to date and outlined what would come next.

It was on April 25, 2016, that Prince Mohammed bin Salman, then Saudi Arabia’s deputy crown prince, unveiled a strategic plan designed to transform the Kingdom’s economy, reduce its dependence on oil, and nurture a “vibrant society ... characterized by strong roots and strong foundations that emphasize moderate Islam, national pride, Saudi heritage, and Islamic culture.”

On the same day, in an interview with Al Arabiya news channel, he talked about the Saudi government having targets, key performance indicators and project management offices.

Exactly five years on, Crown Prince Mohammed bin Salman appeared on the Liwan Al Mudaifer Show to say: “We had a housing problem for 20 years that we could not resolve. A citizen would be waiting to receive a loan or a housing subsidy for like15 years.

“The level of housing did not increase beyond 40 and 50 percent. Before Vision 2030 it was 47 percent. And during the reign of (the late) King Abdullah, about SR11 billion was allocated in 2011. From these SR20 to SR50 billion, only SR2 billion was disbursed but not used. The Ministry of Housing could not transfer them to existing projects because the condition of the states was quite weak.

“The ministries were scattered. There wasn’t a public policy, so the Ministry of Housing could not succeed without having a general policy for the state in coordination with the municipalities, the Central Bank and the Ministry of Finance for enacting legislation, private sector, etc.

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“So, this SR 250 billion was returned to the treasury and an annual budget was disbursed. But the outcome was that the percentage of housing increased from 47 to 60 percent within four years alone, and this is quite an indicator of where we are heading.”

Moving on to the issue of jobs, the crown prince pointed out that unemployment in Saudi Arabia at the beginning of Vision 2030 was about 14 percent. “In the first quarter of 2020 we reached 11 percent. Because of the pandemic unemployment increased. We were the sixth best country in the G20 in terms of performance and unemployment, but in the last part of the fourth quarter of 2021 we were back to 12 percent. We shall break the 11 percent (barrier) and reach 10 percent and a fraction until we reach a better rate,” he said.

“In the non-oil (sector), we raised revenues from SR66 billion to SR350 billion. The commercial register used to take days to produce a commercial registration, going through six entries. Now (it happens) in a period of half an hour. Foreign investment tripled. The Saudi market was stuck between 4,000 points to 7,000 points. Now we have exceeded the 10,000 (mark), which means that the private sector has started to grow.”

The crown prince explained that these were huge numbers in comparison with past figures. “It would take a lot of time to explain this. Economic growth in the non-oil sector was within an average that was not quite as we were aspiring to. In the fourth quarter in 2019, when the non-oil economy grew about 4.5 percent, and then, if it weren’t for the pandemic in 2020, would have exceeded 5 percent in the non-oil sector. We shall recover these levels hopefully this year and the coming years, and even more in the future.”

Referring to the decision on July 1 last year to triple value-added tax to 15 percent was temporary, Crown Prince Mohammed bin Salman said: “This step was painful for me personally as I do not want to harm the Saudi citizen in any way shape or form. But my main job is to guarantee and build the citizens’ future in the long term, for the next 20-30 years.”

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He added: “One of the measures to avoid cancelling allowances or reducing salaries was to increase VAT to 15 percent. Of course, it’s a painful measure. The last thing I want to do is to hurt any Saudi citizens. I have no interest in hurting anyone. But what I want is for our homeland to grow and our citizens to be happy and to prosper. It’s my duty to build for them a long-term future that will continue to grow — not just to satisfy them for three or four years, then exhaust all the saving opportunities of the country towards a better future.

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“So, there were a number of decisions including the VAT. It’s a temporary decision. It will continue for a year, maximum five years, and then things will go back to what they were. We are targeting it to be between 5 to 10 percent, only till we reinstate our balance after the pandemic. Depending on the economic situation or what may transpire, but maximum five, minimum one year.”

Last month, Crown Prince Mohammed bin Salman announced that the Kingdom would spend more in the next 10 years than it had done in the past 300 years as he unveiled a new program to strengthen public-private sector partnerships. At the announcement of the program, named Shareek, he said Saudi Aramco would lead investments in the private sector to the tune of 5 trillion riyals ($1.3 trillion) by 2030.

On Tuesday, he confirmed that “there is a discussion on the acquisition of 1 percent (of Aramco) by one of the world's leading energy companies, and this will be a very important deal to boost Aramco's sales in that country,” but he did not name the company or the country. He said further Aramco stake sale to international investors could happen in the next one year or two.

Talking about the sovereign wealth fund, the Public Investment Fund (PIF), Crown Prince Mohammed bin Salman said: “Our goal is to ensure that the fund achieves growth. We aim to increase the fund’s assets to SR10 trillion in 2030.”

Under the Vision 2030 strategic plan, Saudi Arabia has launched several multi-billion-dollar projects that aim to put it on the map as a major actor in the world of innovation, tech and youth-driven initiatives. The Kingdom’s non-oil revenues have increased by over 200 per cent since the start of the Vision 2030 plan. “If we look back, oil has helped develop our country for centuries, so we’ve always had that impression to depend on oil. But the increase in population will not be able to depend on oil production at the rate we are going,” Crown Prince Mohammed bin Salman said.

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He said Saudi Arabia’s oil revenues were becoming insufficient to cover the needs of the growing population, a fact that was the driving force behind the announcement of the Vision 2030 reform plan to diversify the economy. “We went from a population of 2 to 3 million, to nearly 20 million Saudis since the discovery of oil. So, oil revenues now barely cover the needs and the way of life that we have grown accustomed to since the 1960s, ‘70s, ‘80s and ‘90s. So, had we continued on the same old path, there is no doubt that with the population growth, it would have affected us in the next 20 or 10 years in the quality of life that we have grown used to for the past 50 years,” he said.

The crown prince said the second need for the reform plan was the numerous opportunities in the Kingdom of Saudi Arabia in different sectors other than just the oil sector.

“In mining in tourism, in services, in logistics, in investment, etc. (Because of the) huge opportunities, even if we didn’t have any problem in terms of oil, there would still be enthusiasm and a big drive towards achieving these enablers that we aspire to benefit from as Saudis for our beloved country,” he said.

“So, I believe that was the main emphasis for the Vision 2030, in order to eliminate the challenges that we face and to exploit the untapped opportunities that may constitute 90 percent of our situation today, and we can continue to grow and prosper and compete at the world level.”

He added: “Oil is still the main source of income for the state. My intention is to make sure that the country is secure, safe and has a better future to look forward to.”

Crown Prince Mohammed bin Salman also lauded the progress made in environmental protection, pointing out that vegetation cover across the Kingdom has increased over the past four years by 40 percent, which will likely have a direct impact on tourism and foreign investment. This is no small matter given that, as the crown prince said, the tourism sector alone is expected to create 3 million jobs by 2030.

Despite a challenging 2020 because of the coronavirus pandemic, Crown Prince Mohammed bin Salman said he believed Saudi Arabia is firmly back to growth. “We are close to achieving the overall aims and goals of Vision 2030. We are on the right track. We will see a strong rebound in our economic performance and achievements this year,” he said.

Looking back at the pre-Vision 2030 era, he described 2015 as a particularly difficult year. “We made some serious changes to many ministries and government sectors, including security and the economy by changing strategies and imposing the programs of Vision 2030. Lack of a strong state structure was one of the main challenges we faced in 2015,” he said.

“We managed to restructure various ministries by establishing new councils. The most important thing to have is integrity and passion when making these changes.”


Saudi Arabia’s PIF halts Swiss financial market investments over Credit Suisse fallout

Updated 23 min 26 sec ago
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Saudi Arabia’s PIF halts Swiss financial market investments over Credit Suisse fallout

  • Decision driven by how Swiss regulators handled 2023 government-backed rescue of Credit Suisse by UBS Group
  • PIF continues to expand footprint across Europe, signaling redirection of capital

RIYADH: Saudi Arabia’s Public Investment Fund will no longer allocate capital to Switzerland’s financial markets, two years after suffering losses from the collapse of Credit Suisse.

During the FII PRIORITY Europe Summit in Albania, PIF Gov. Yasir Al-Rumayyan said that the decision was driven by the manner in which Swiss regulators handled the 2023 government-backed rescue of Credit Suisse by UBS Group, reported Bloomberg.

The abrupt deal was executed without shareholders’ approval, impacting investors across the Middle East.

PIF, one of the world’s largest sovereign wealth funds, is reassessing its investment strategy amid growing concerns over regulatory stability and investor protection.

The fund’s decision to halt investments in Switzerland’s financial markets marks a significant shift in its approach, underscoring the long-term impact of the 2023 Credit Suisse collapse on regional and institutional investor confidence.

PIF also continues to expand its footprint across Europe, signaling a redirection of capital.

“We’re not going to invest in the financial markets in Switzerland. If you change something overnight and wipe out all of your investors, this is a big red flag,” Al-Rumayyan said, as reported by Bloomberg.

The remarks were made during an on-stage discussion with Noel Quinn, newly appointed chairman of Zurich-based Julius Baer Group Ltd.

Quinn responded: “As the chairman of a Swiss bank as of 10 days ago, that concerns me.”

The 2023 acquisition of Credit Suisse was finalized rapidly following a sharp decline in its stock price.

The plunge became worse after the former chairman of the Saudi National Bank, Ammar Al-Khudairy, said the bank would “absolutely not” be open to further investments in Credit Suisse.

“The deal didn’t receive approval from either Credit Suisse or UBS shareholders as regulators and lawmakers rushed to contain a crisis of confidence that was spreading across global markets,” according to Bloomberg.

The 2023 acquisition of Credit Suisse was finalized rapidly following a sharp decline in its stock price. Shutterstock

At the time, shareholders from the Middle East, including SNB and the Qatar Investment Authority, collectively held around 20 percent of Credit Suisse.

SNB, which was the largest shareholder in the Swiss lender, had called on Credit Suisse to reject the offer from UBS, Bloomberg reported.

Other investors had cautioned that the Swiss government’s decision to override standard merger procedures and sideline shareholder votes could deter institutional investors.

Legal analysts also warned that the rushed nature of the transaction had undermined Switzerland’s standing as a reliable investment destination where the rule of law is safeguarded.

Al-Rumayyan’s remarks came as PIF announced plans to open a subsidiary office in Paris and committed to doubling its investments in Europe to $170 billion by the beginning of the next decade.

The fund has already deployed approximately $85 billion across the region between 2017 and 2024, making strategic investments in key European economies, including the UK, France, and Italy.


Saudi Arabia and Kyrgyzstan announce establishment of a joint business council 

Updated 21 May 2025
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Saudi Arabia and Kyrgyzstan announce establishment of a joint business council 

  • Forum reviewed investment opportunities, advantages, and incentives in Saudi Arabia and Kyrgyzstan
  • Bilateral meetings were held between company representatives from both countries

BISHKEK: Saudi Arabia and Kyrgyzstan, represented by the Saudi Chambers Federation and the Kyrgyz Chamber of Commerce and Industry, announced the signing of an agreement to establish a Saudi-Kyrgyz Joint Business Council — a significant step to advance economic cooperation between the two countries. 

The signing ceremony took place on the sidelines of the Saudi-Kyrgyz Business Forum held on May 21 in Bishkek, the Kyrgyz capital, in the presence of Kyrgyz Minister of Economy and Commerce Bakyt Sydykov, Saudi Chambers Federation Chairman Hassan bin Muajab Al-Huwaizi, and several ministers and officials from both nations, the Saudi Press Agency reported. 

The forum was also attended by Saudi-Kyrgyz Business Council Chairman Ahmed Al-Dakhil, Saudi Arabia’s Ambassador to Kyrgyzstan Ibrahim bin Radi Al-Radi, Kyrgyzstan’s Ambassador to Saudi Arabia Ulukbek Maripov, along with more than 100 investors. 

The chairman of the Saudi Chambers Federation emphasized that the establishment of the joint business council is the result of sustained efforts and mutual desire, providing an effective platform for Saudi and Kyrgyz businessmen to showcase and promote their activities and build commercial partnerships, amid vast opportunities for cooperation between the two countries. 

The joint business forum reviewed investment opportunities, advantages, and incentives in Saudi Arabia and Kyrgyzstan across sectors including exports, healthcare, pharmaceuticals, banking, hydropower, agriculture, and technology. 

Bilateral meetings were also held between company representatives from both countries. 

Notably, the federation’s delegation visits to Kyrgyzstan included a series of meetings with government and private sector officials to discuss prospects for economic cooperation and explore investment opportunities. 


Saudi crude output hits 8.96m bpd in March: JODI data

Updated 21 May 2025
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Saudi crude output hits 8.96m bpd in March: JODI data

  • Crude exports fell by 12.11% month on month to 5.75 million bpd
  • Kingdom’s slight increase in crude production came amid a broader strategic pivot within OPEC+

RIYADH: Saudi Arabia’s crude oil production rose to 8.96 million barrels per day in March, reflecting a 0.11 percent monthly increase, according to the latest Joint Organizations Data Initiative data.

According to the database, crude exports fell by 12.11 percent month on month to 5.75 million bpd.

Refinery crude exports rose 10.3 percent during this period to 1.55 million bpd. The uptick was driven primarily by diesel shipments, which jumped 20.66 percent from the previous month to 806,000 bpd.

It also accounted for the largest share of refined product exports in March at 52 percent, followed by motor and aviation gasoline at 17 percent, and fuel oil at 12 percent.

Total refinery output reached 2.94 million bpd in March, a 12.32 percent monthly increase, with diesel comprising 42 percent of refined products, motor and aviation gasoline 24 percent, and fuel oil 15 percent.

Domestic demand for refined petroleum products increased by 223,000 bpd in March compared to the previous month, reaching 2.22 million bpd.

On an annual basis, demand rose by 5.07 percent, equivalent to 107,000 bpd.

The Kingdom’s slight increase in crude production across the month came amid a broader strategic pivot within OPEC+, which has agreed to significantly boost oil output starting in June. The alliance announced an additional 411,000 bpd increase for June, following a similar adjustment made for May.

This marks a continuation of the group’s recent efforts to accelerate the return of previously curtailed supply to the global market. The upcoming increase is expected to add further downward pressure on prices, which have already been trending lower due to ample inventories, modest international demand growth, and increasing non-OPEC output.

Total refinery output reached 2.94 million bpd in March, a 12.32 percent monthly increase. Shutterstock

Direct crude usage

Saudi Arabia’s direct crude oil burn rose to 383,000 bpd in March, reflecting a 35.3 percent increase from the previous month.

Direct crude burn refers to the use of unrefined crude oil for electricity generation, rather than for export or refining.

The increase came amid the seasonal ramp-up in cooling needs as temperatures begin to rise heading into the warmer months.

Although the Kingdom has made substantial progress in expanding its natural gas infrastructure to reduce reliance on direct crude burn, fluctuations still occur, particularly in transitional months like March, when energy demand begins to shift but supply systems have not fully ramped up.


Saudi Arabia launches BAE Systems Arabian Industries to localize defense manufacturing

Updated 35 min 29 sec ago
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Saudi Arabia launches BAE Systems Arabian Industries to localize defense manufacturing

  • Company results from the merger of two major players in the defense ecosystem
  • Merger was finalized nearly four months ago to consolidate operational strengths

JEDDAH: Defense manufacturing is set to advance in Saudi Arabia with the launch of BAE Systems Arabian Industries, a new entity aimed at accelerating localization and strengthening the Kingdom’s military industrial base. 

The company results from the merger of two major players in the defense ecosystem — BAE Systems Saudi Development and Training, which focuses on capability building, and the Saudi Maintenance and Supply Chain Management Co., a provider of supply chain and technical services, the Saudi Press Agency reported. 

The move marks further progress in the Kingdom’s push to expand its defense capabilities, with localization of military spending rising to 19.35 percent in 2024, up from just 4 percent in 2018. The Kingdom aims to surpass 50 percent by 2030, in line with Vision 2030’s goal of a self-sufficient defense sector. 

Ahmad Abdulaziz Al-Ohali, governor of the General Authority for Military Industries, speaks during the inauguration ceremony in Riyadh. X/@GAMI_KSA

Ahmad Abdulaziz Al-Ohali, governor of the General Authority for Military Industries, inaugurated BAE Systems Arabian Industries at an official ceremony held at the company’s new headquarters in Riyadh, attended by several officials and defense industry leaders. 

In a post on his X handle, the governor said: “This will enhance local content and open up broad horizons for national and international companies to contribute to building a solid and sustainable military-industrial system, to enhance local content in terms of human and technical cadres.” 

The merger was finalized nearly four months ago to consolidate operational strengths and leverage over three decades of experience in defense training, capability development, and logistics. 

Saudi Arabia continues its push to expand its defense capabilities, with localization of military spending. X/@GAMI_KSA

“He pointed out that the integration of national and global expertise within this unified entity reflects the confidence of major companies in the attractive investment environment provided by the authority in cooperation with its partners in both the public and private sectors,” the SPA report stated. 

Al-Ohali noted that the initiative would play a key role in transferring knowledge and building national expertise, supporting the Kingdom’s goal of localizing over 50 percent of military spending by 2030. 

He reaffirmed the authority’s support for initiatives that boost local content and create opportunities for both national and international companies to help build a strong and sustainable military-industrial sector. 

The inauguration of BAE Systems Arabian Industries marks a major step forward in enhancing local content and building national capabilities in the Saudi military industries sector. X/@GAMI_KSA

In a LinkedIn post, Abdulatif Al-Shaikh, the new company’s CEO, said: “We are guided by a clear vision to be the leading Saudi company in the defense sector by supporting and developing capabilities within the Kingdom and across the region, in alignment with Vision 2030.” 

In another development, Saudi Arabia recently completed production of its first locally manufactured components for the Terminal High Altitude Area Defense, or THAAD system launcher, in Jeddah.

This follows localization agreements signed during the 2024 World Defense Show and reflects increasing technical collaboration with global defense firms such as Lockheed Martin. 


Egypt’s exports to Lebanon up 43.8% across 2024: Official data

Updated 21 May 2025
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Egypt’s exports to Lebanon up 43.8% across 2024: Official data

  • Value of imports declined by 2.3%, totaling $237.7 million
  • Trade exchange between Egypt and Lebanon reached $1 billion in 2024

RIYADH: The value of Egyptian exports to Lebanon saw a 43.8 percent year-on-year surge in 2024 to reach $762.8 million, according to new figures.

Data from Egypt’s Central Agency for Public Mobilization and Statistics also showed that imports from the Middle Eastern country declined by 2.3 percent, totaling $237.7 million during the same period.

These shifts in trade come amid broader economic trends. The region’s gross domestic product grew by 1.8 percent in 2024, reaching $3.6 trillion despite ongoing challenges, according to a March report by the Arab Investment and Export Credit Guarantee Corporation, or Dhaman.

Looking ahead, this economic momentum appears set to continue. Moody’s projects 2.9 percent growth for the region in 2025, up from 2.1 percent in 2024, while maintaining a stable outlook for the region’s sovereign credit fundamentals over the next 12 months.

Egyptian investments in Lebanon amounted to $9.7 million during the fiscal year 2023/2024. File/Reuters

The newly released CAPMAS report revealed there was “an increase in the value of trade exchange between Egypt and Lebanon, reaching $1 billion in 2024, compared to $774 million in 2023, an increase of 29.3 percent.”

The main export groups of goods to Lebanon during 2024 included fuels, mineral oils, and distillation products worth $215 million, iron and iron products worth $65 million, and cement worth $55 million.

The value of fruit and vegetable exports stood at $48 million, while sugar and sugar products were worth $41 million. 

As for the main import groups of goods from Lebanon during the same year, they entailed iron and iron products worth $118 million, fruits and vegetables worth $72 million, and electrical appliances and equipment worth $22 million.

The value of plastics imports stood at $4 million, while dyeing and coating extracts were also worth $4 million.

The value of fruit and vegetable exports stood at $48 million, while sugar and sugar products were worth $41 million. Shutterstock

The CAPMAS data also shed light on how the value of Lebanese investments in Egypt amounted to $51.2 million during the fiscal year 2023/2024, compared to $51.4 million during the fiscal year 2022/2023.

Egyptian investments in Lebanon amounted to $9.7 million during the fiscal year 2023/2024, compared to $7.9 million during the fiscal year 2022/2023.

“The value of remittances from Egyptians working in Lebanon amounted to $42.9 million during the fiscal year 2023/2024, compared to $38.1 million during the fiscal year 2022/2023, while the value of remittances from Lebanese working in Egypt amounted to $3.5 million during the fiscal year 2022/2023, compared to $3.7 million during the fiscal year 2022/2023,” the CAPMAS report added.

According to estimates, the number of Egyptians residing in Lebanon reached 11,300 by the end of 2023, the report concluded.