Saudi Arabia's tax revenue surge fuels 2023 budget growth

RIYADH, Feb 18 (Arab News): Saudi Arabia experienced an 11 per cent increase in non-oil revenues, reaching SR457.73 billion ($122.06 billion) in 2023 compared to 2022, official data showed.
The growth, primarily driven by increased taxes on income, profits, and capital gains, resulted in a 58 per cent surge in these taxes, totaling SR38.64 billion, as reported in the fiscal year 2023 budget performance report released by the Ministry of Finance.
This aligns with Saudi Arabia's efforts to position itself as a global investment destination and business centre, aspiring to join the ranks of the world's leading economies.
The surge in foreign direct investment into Saudi Arabia may have contributed to an uptick in tax revenues as more international businesses establish operations in the country.
The government's initiatives to enhance FDI inflows, including offering zero income tax for companies relocating their regional headquarters to Saudi Arabia, are also poised to yield long-term benefits.
These measures are expected to spur economic growth, foster expansion, and generate employment opportunities.
Taking to Arab News, Talat Zaki Hafez, an economic columnist and banking expert, laid emphasis on the significant impact of these government incentives, as they are expected to stimulate business activities in the Kingdom.
Furthermore, other revenues, including those from various government units and administrative fees, rose by 15 per cent to SR101.1 billion, constituting 22 per cent of the total state revenues.
Despite taxes on goods and services contributing the highest share at 57 per cent, they experienced a more modest 4 per cent increase.
Despite taxes on goods and services contributing the highest share at 57 per cent, they experienced a more modest 4 per cent increase.
Other revenues, including those from various government units and administrative fees, rose by 15 per cent to SR101.1 billion.
Oil revenues underwent a 12 per cent decrease to SR754.56 billion, constituting 62 per cent of the budget's revenues. Total expenditure increased by 11 per cent to SR1.29 trillion, predominantly driven by an 18 per cent increase in expenses for goods and services.
Conversely, oil revenues underwent a 12 per cent decrease to SR754.56 billion, constituting 62 per cent of the budget's revenues. This decline, attributed to voluntary oil output cuts, underscores Saudi Arabia's commitment to Vision 2030 reforms aimed at strengthening the non-oil economy's role in national development.