Budget deficit is expected to fall to $79.2 billion

Jojo Puthuparampil is a business news writer for Inc. Arabia.

Saudi Arabia’s budget for 2017, which is expected to be released on Thursday, is likely to include a monthly fee for expat workers in the country, Arab News reported

The fee is likely to be a fixed amount of around SAR800 ($213) a month, the newspaper said citing local reports. The fee is likely to be minimal and in no way comparable to taxes is Europe and the US, the report said.

However, there has been no confirmation from the government.

The country was allocating SAR150 million ($40 million) to prepare income tax for foreign residents, media reports previously said citing documents released as part of the National Transformation Plan earlier this year.

However, the country’s finance minister then said that this was just a proposal.

Saudi’s budget deficit is likely to fall to SAR297 billion ($79.2 billion), compared with SAR326 billion predicted by the government, according to a Reuters report.

The shrunken deficit would provide scope for the government to implement reforms.

The upcoming budget will also see spending of SAR890 billion, a 6% rise from earlier projections.

The budget will boost spending to support economic growth, the newswire reported citing sources.  

Saudi government revenues totaled SAR528 billion in 2016, slightly higher than SAR514 billion originally projected. 

Its spending was SAR825 billion, somewhat lower than the SAR840 billion as per the original plan.

The higher spending would permit gross domestic product growth to accelerate to 2.0% in 2017 from an estimated 1.7% this year, the report by the newswire said.

According to local reports, the budget will also include an increase in fuel and electricity prices.

Fuel prices will increase by 40% while electricity tariffs will go up 20%, local reports said.

The budget is also expected to include a financial aid program to compensate low- and middle-income Saudis hit by austerity policies, the report by Reuters said.

 

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