2024-03-05 09:15:54
Al-Marsad newspaper: Finance Minister Mohammed Al-Jadaan was a guest on the Socrates podcast program this Tuesday morning.
Discussing difficult decisions
The Minister of Finance spoke regarding the difficult decisions taken by the ministry, such as imposing the value-added tax, stopping allowances, imposing fees on foreign companions, the financial crisis in 2020, and raising the value-added tax.
Added tax
The Minister of Finance explained that this is not the appropriate time to reconsider the tax, as global economic conditions remain unstable, such as fluctuations in the oil markets, uncontrolled inflation, and geopolitical unrest at the global level.
He pointed out that the value-added tax was approved instead of the income tax for a number of reasons, including its compatibility with the Gulf Cooperation Council system, and there is also a fear among some Gulf countries (which are still rentier states) of the exit of capital, in addition to the cost and ease of applying the value. The addition and the ease of addressing its shortcomings, such as supporting people with limited income through the citizen’s account.
The ability of the Kingdom’s economy to grow
He continued that the government conducted a parallel study of the Kingdom’s economy’s ability to grow, indicating that this was to take into account that spending allocated to support economic activity would not leak abroad through the import process.
He explained that financing Vision 2030 projects is done by estimating the necessary financial space by studying the gap between project financing requests versus the revenues expected to be obtained, in addition to the levels of debt that the government can obtain, while maintaining the level of necessary reserves.
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