Riyadh – Mubasher: Saudi Arabia intends to reduce the unemployment rate to 7% by 2030, Crown Prince Mohammed bin Salman revealed in an interview with Al Saudiya TV channel.
He stated that Saudi Arabia is utilising both oil and non-oil sectors, adding that the Kingdom is in talks to sell a 1% stake in the Saudi Arabian Oil Company (Saudi Aramco) to an undisclosed international company.
He elaborated: “I don’t want to give any promises about deals finalising, but there are discussions happening right now about a 1% acquisition by one of the leading energy companies in the world.”
“This deal could be very important in strengthening Aramco’s sales in the country where this company resides,” the Crown Prince noted.
Saudi Arabia could announce a secondary offering of shares in Aramco within the next two years, Bloomberg reported.
The Kingdom is producing for oil derivatives and others around 800,000 barrels each year, whereas Aramco and Saudi Arabia will direct 3 billion barrels to manufacturing industries and others.
Mohammed bin Salman stated that “there is a wrongful perception that the Kingdom of Saudi Arabia would like to dispose of the oil.” Demand for oil is expected to grow until 2030, yet others project that the demand for oil will start decreasing gradually starting 2030 and until 2070.
As for the educational segment, the Kingdom intends to have three of its universities among the world's top 200 universities, he added.
Regarding the increased taxation, the Crown Prince said the 15% value-added tax (VAT) rate is temporary. It will continue for one year to a maximum of five years, and then things will go back to what they were, with the VAT rate at 5% or 10%. The GCC agreed on the VAT to be 5%, and it will be set so that it would be the lowest in the world.
He also confirmed that there will not be any income tax at all in Saudi Arabia.
As for Saudi Arabia’s Public Investment Fund (PIF), its size will expand to reach SAR 10 trillion by 2030. The goal was set for 2020 at SAR 7 trillion.
Saudi Arabia’s public investment that has been spent in 2020 amounted to SAR 90 billion in new fields, new investments not in stocks. In 2021, the Kingdom will spend SAR 160 billion, the Crown Prince said.
Meanwhile, the state budget’s capital is spending SAE 150 billion, so “it is spending more.” This means that PIF motivates the Saudi economy more than the budget and this will continue in an ascending manner until it exceeds SAR 300 billion in 2030.
The Saudi Crown Prince added that there will be new investments so only three times even or a bit less than what the state used to spend in the Kingdom.
It is worth noting that Aramco has been convening preliminary discussions for a potential sale of its natural gas pipeline network. This came two weeks after the company had announced that a consortium led by Washington-based EIG Global Energy Partners would invest $12.4 billion in its oil pipelines.
