Saudi Arabia has developed an economic strategy that provides for in the budget $100 billion non-oil revenue annually by 2020 in the context of falling oil prices, reports Bloomberg with reference to the member of the Royal family of Saudi Arabia and the country’s defense Minister Mohammed bin Salman.
It seeks to accomplish this through, in particular, cuts in subsidies and increasing taxes. “This is a great software package that is aimed at restructuring of some budget sectors”, — said the Prince.
According to him, the developed actions include the restructuring of subsidies and the imposition of additional taxes — value added on energy and sugary drinks and luxury. Another popular measure is similar to the American green card, residence permit for a person who is not a citizen of the country, and the increase of quotas for hiring foreign specialists.
Saudi authorities hope thus to obtain an additional $100 billion a year by 2020. These measures involve the Saudi authorities, will triple oil revenues and balances the budget. Measures such as the value added tax, a system of green cards, as well as increasing quotas for foreign workers, according to calculations, would provide $10 billion each. Another $30 billion is expected due to the subsidy reform.
In addition, the strategy involves the sale of shares of Saudi Aramco on the stock exchange and the largest sovereign Fund in the world. Fund Public Investment Fund (PIF) will unite with assets of $2 trillion and will be used by the Kingdom for investment in non-oil sectors of the economy. Currently, the assets of the PIF, according to the Sovereign Fund Institute, is $5.3 billion.