Saudi Arabia has developed a package of programs that is designed to increase non-resource revenues to the country's budget by $100 billion per year by 2020. In particular, the strategy involves increasing taxes and cutting subsidies

Flag of Saudi Arabia (Photo: AP)

Saudi Arabia has developed an economic strategy that provides for the country's budget to receive $100 billion in non-oil revenues per year by 2020 in the face of falling oil prices, reports Bloomberg , citing Prince of Saudi Arabia Mohammed bin Salman.

“This is a large package of programs that is aimed at restructuring some budget-forming sectors,” the prince said.

According to him, the measures being developed include, among other things, the restructuring of subsidies, as well as the introduction of additional taxes - on value added, on energy and sweet drinks and on luxury. Another measure being discussed is an analogue of an American green card, a residence permit for a person who is not a citizen of the country, and an increase in quotas for hiring foreign specialists.

The Saudi authorities expect to receive an additional $100 billion a year in this way by 2020. In particular, programs such as the value added tax, the green card system, as well as increasing quotas for foreign employees are expected to generate $10 billion each. Another $30 billion is expected to be received through subsidy reform.

Overall, these measures, the Saudi authorities assume, will triple non-oil revenues and thus balance the budget.

In addition, the strategy involves selling Saudi Aramco's stake on the stock exchange and creating the largest sovereign wealth fund in the world. The Public Investment Fund (PIF) will pool assets worth $2 trillion and will be used by the kingdom to invest in non-resource sectors of the economy. PIF's assets currently total $5.3 billion, according to the Sovereign Fund Institute.

Prince Mohammed is second in line to the Saudi throne. He heads the Economic and Development Council, a powerful economic planning body that was created after King Salman's accession to the throne in early 2015.

Saudi Arabia will replenish its budget by $100 billion through new fees