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S. Arabia Needs More Tax, Less Gov’t
World Economy

S. Arabia Needs More Tax, Less Gov’t

A former Saudi official has urged Riyadh to impose taxes, saying the Persian Gulf country is facing bleak economic prospects as oil is set to deplete.
Abdul Aziz Al Dakheel, former finance ministry undersecretary, also suggested slashing the number of government offices and sacking unnecessary employees, SPA (Saudi Press Agency) reported.
In remarks published by the Arabic language daily ‘Sabq’, he said oil provides more than 90% of Saudi Arabia’s income and hard currency, and funds almost all the country’s imports of goods and services.
“My question now is: Will oil last forever? The answer, of course, is no. The day will come when it will deplete, say within 30, 50 or 100 years. This is a fact which we should accept. At the same time, we are a society with very high population growth and this means demand for goods and services is steadily rising,” he said.
“Our country is mostly a desert without rivers, lakes or much rain. The water problem has started to deteriorate. These are only part of the problems with an economic nature that make me fear the future of this country.”
Dakheel, a prominent businessman and an economist, said Saudi Arabia, the world’s largest oil exporter, needs to introduce taxes as is the case in most other countries.
He said taxes must be imposed on individuals and companies operating in the country, adding that only the poor should be exempted.

 Layoff Civil Servants
Dakheel said another measure which must be taken by the government to offset volatile oil revenues is to slash the number of departments and lay off a large number of civil servants.
He said ministries and other government departments in the largest Arab economy are suffering from “severe” redundancy. “There are government offices which have 10 employees when only three are needed. The presence of that number of employees only prolongs procedures, obstructs work and reduces individual productivity.
“There is a need to restructure the state system by merging some of them, cancelling others and laying off the unnecessary employees, mainly old employees. These can be given a 10-year salary so they can retire or set their own business.”

 43% Youth Jobless
Saudi Arabia is suffering from a high unemployment rate among young men as more than 43% of citizens aged between 20 and 24 years are unemployed, according to government figures.
The rate at the end of 2009 was higher than in 2008 despite an ongoing drive by the world’s oil powerhouse to find jobs for its fast-growing nationals and dispose of hundreds of thousands of expatriate workers who dominate the private sector.
The figures by the government statistics and information center showed nearly 43.2% of the Saudi males and females aged 20-24 years were unemployed at the end of 2009, nearly 20% above the 2008 rate.

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