Saudi Arabia plans to more than triple the government’s non-oil revenues and clampdown on public-sector salaries over the next five years, ministers said as they described reforms designed to reduce the economy’s dependence on oil and build a sustainable future.
The National Transformation Plan aims to boost non-oil revenue to 530 billion riyals ($141 billion) by 2020, creating some 450,000 non-government jobs, according to comments by ministers and documents distributed to reporters in Jeddah, Reuters reported.
The plan aims to “enhance the level and quality of services” provided by government and “achieve a prosperous future and sustainable development,” it said.
The NTP, which includes over 500 projects and initiatives as well as performance indicators for ministries and other government agencies, will cost around 270 billion riyals to implement, the document showed.
Minister of State Mohammed al-Sheikh said the cost would have no impact on Saudi budget spending, and added that a further 300 billion riyals was expected to be contributed to NTP initiatives by the private sector.
The plan is part of a wider, long-term reform drive known as Vision 2030, which was announced by Deputy Crown Prince Mohammed bin Salman in April.
The finances of the world’s top oil exporter have been hit hard since the summer of 2014, when crude prices plunged, producing a state budget deficit of nearly $100 billion last year.
The plan aims to increase the percentage of government debt to gross domestic product to 30% from 7.7% now.
Under Vision 2030, new non-oil revenue is expected to come from the introduction of a value-added tax, “sin taxes” on sweet drinks and tobacco, and fees imposed on the private sector.
Al-Sheikh said there were no plans to introduce income tax for citizens. The text of the plan proposed to spend 150 million riyals on preparing income tax for residents, a phrase normally applied to expatriates. According to the NTP, the government will strive to reduce the value of public salaries and wages as a proportion of the budget to 40% from 45% by 2020, and cut water and electricity subsidies by 200 billion riyals.
The Energy Ministry aims to maintain its oil production capacity at 12.5 million barrels per day (bpd), raise gas output capacity to 17.8 billion standard cubic feet a day from 12 billion, and raise refining capacity to 3.3 million bpd from 2.9 million, the document said.
