RIYADH (RAHNUMA): Saudi Arabia’s Finance Ministry said it looks at long-term and historical periods to ensure oil price outlook is more accurate, according to Finance Minister Mohammed Al-Jadaan.
Speaking at a budget forum in Riyadh, the finance minister said revenues are calculated based on structural income factors.
He said the Saudi budget surplus will go to the National Development Fund to finance the private sector (projects), the Public Investment Fund, and to pay off debts.
The minister said the objectives are clear financial sustain- ability and empowerment of the Kingdom’s private sector.
He said during the last 25 years ending 2015 the ministry noticed fluctuation in public expenditures which resulted from more than 85 percent of the fluctuation in oil prices. “If prices go high, expenditures go high ,if prices go down, expenditures go down,” he added.
Al-Jadaan said fluctuations in Saudi spending went down from 25 percent between 1995-2015, to 2.9 percent over the past five years due to the fiscal sustainability program.
Commenting on the non-oil sector, the minister said the income generated through this sector will be used to bolster the economy by exploring more avenues for revenue generation.
He said the structural revenues on which we base the ceilings on the mid-term range are based on a very complicated equation that takes into consideration the historical review of oil prices.
Following the approval of the budget, the minister earlier said the Kingdom will reconsider its current value-added tax rate once the government’s financial position improves.
The minister highlighted the importance of supporting the growth of small and medium enterprises, in parallel with the implementation of structural transformations that support long-term growth.