The Finance Minister also said the goal of the increased rate of Value Added Tax was to deal with the economic effect of the COVID-19 pandemic
During an interview with TV news channel The Saudi Arabian Finance Minister Mohammed Al-Jadaan said that the Kingdom of Saudi Arabia has no plans to reduce the VAT (Value Added Tax) of 15% in the near future, He said The decision on VAT will be reviewed after several years and only when the public finances improve.
The Finance Minister also said the goal of the increased rate of Value Added Tax was to deal with the economic effect of the COVID-19 pandemic, He Said after several years or may be within 5 years it will be reexamined but there will be no VAT Reduce anytime soon.
May 2020 Saudi Arabia raised VAT from 5% to 15% as part of strict measures in order to support its pandemic hit economy, He stated that, We want to continue working efficiently and we may raise public spending but any increase in spending items in the future including the salaries of government employees will be to cover inflation.
The finance minister has urged the Kingdom to maintain reasonable spending despite the increase in revenue. He described the G20's approval as "excellent" for imposing taxes on multinational companies. As such it will benefit the entire economy and slow down the race to reduce taxes, which will lead to a widening deficit. It will also contribute to attracting MNCs to Saudi Arabia because all countries will have the same tax, which will be greater justice.
Third quarter of this year (2021) Saudi budget recorded the first quarterly surplus since early 2019 which is estimated at 6.7 billion Riyal. The surplus revenue was the result of a 60% Income increase on an annual basis along with a limited decline in public spending.