Now fully part of the global economy, Saudi Arabia cannot avoid all of the problems that are racking that economy. The government has stepped in to reduce taxes on investors in six of the less-developed provinces of Saudi Arabia in order to make investments (both foreign and domestic) more attractive.
Investors in six provinces offered tax concessions
P.K. Abdul Ghafour I Arab NewsJEDDAH: The Council of Ministers yesterday decided to provide tax concessions to investors in the provinces of Hail, Northern Border, Jizan, Najran, Al-Baha and Al-Jouf for a period of 10 years, Culture and Information Minister Iyad Madani said.
“A 50 percent tax cut has been offered on the annual cost of training Saudis and another 50 percent tax cut on annual salaries paid to Saudis,” Madani said after the weekly Cabinet meeting at Al-Salam Palace in Jeddah. A company should invest not less than SR1 million and employ no fewer than five Saudis in basic technical and administrative jobs for a year in order to benefit from the tax cut.
The Cabinet meeting, chaired by Custodian of the Two Holy Mosques King Abdullah, stressed that the government would take necessary measures to ensure economic stability and protect the country’s financial institutions from the fallout of the global financial crisis.
…
And while the economic crisis has plenty of losers, it also provides opportunities to win. Arab News reports that decreased demand has resulted in lower wholesale prices on products. That is being reflected in lower prices on the retail level, too, starting with Saudi fast food outlets.
Major fast food chain slashes prices, others likely to follow suit
RSS feed for comments on this post.
Sorry, the comment form is closed at this time.
November:28:2008 - 22:46
“A 50 percent tax cut has been offered on the annual cost of training Saudis and another 50 percent tax cut on annual salaries paid to Saudis,”
I’m trying to figure out the bottom line effect of such tax cuts. I understand that Saudi Arabia does not apply corporate income taxes in general other than Zakah. Thus, what are the amount percentages of mentioned taxes from the company’s revenue?
November:28:2008 - 23:29
Foreign companies doing business in Saudi Arabia are taxed.
Ordinary corporate income is taxed at a 20% rate; taxes on foreign oil industry profits ranges from 30%-85%
You can see the whole array of Saudi taxes, excluding zakat at this link to the Federal International Trade Association.
This is likely an inducement to have foreign companies hire Saudi employees.