Photo for illustrative purposes only. Saudi crown prince Mohammed bin Salman during the G20 meeting on Nov 20, 2018 in Buenos Aires, Argentina. Matias Lynch/Shutterstock

Islamic Finance

Saudi crown prince: VAT increase temporary, no plans to introduce income tax

Saudi Arabia’s threefold increase of value-added tax is temporary and there are no plans to introduce income tax, said crown prince Mohammed bin Salman in a TV interview on Tuesday (April 27).

The government increased VAT from 5% to 15% in July last year to boost state finances hit by lower oil prices, a move the crown prince described on Tuesday as “painful”.

The current VAT rate will last one to five years and then go down to between 5% and 10%, he said.



The crown prince spoke on a wide range of issues on the fifth anniversary of the launch of Vision 2030, the country’s masterplan to diversify its economy away from heavy reliance on hydrocarbons.

He revealed the government is in discussions to sell 1% of Saudi Aramco to a global energy company. The state-owned oil giant sold more than 3 billion of its shares in December 2019 and January 2020, raising some $29.4 billion in total.

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