Income in Saudi Arabia remains tax-free. The kingdom has no plans to introduce an income tax, Crown Prince Mohammed bin Salman said in a televised address yesterday. The tripling of the VAT rate last year to 15 percent is only designed for one to five years, the tax will then be reduced to five to ten percent, the prince announced.
The kingdom had raised the levy to offset the impact of lower oil revenues on government finances. The move has been criticized by citizens and businesses who expected more support from the government during the coronavirus pandemic.
„The VAT hike has been a painful measure and I hate hurting any Saudi citizen, but it is my duty to build a long-term, sustainable future for the Saudis,“ Salman said. Since 2016, the government wants to create millions of jobs with economic reforms and reduce unemployment to seven percent by 2030. The plans were thwarted by the crisis that sent oil prices plummeting last year.
