Zakat collected from firms in Saudi Arabia goes to Social Security Agency: official

Yasser Al Quhidan

The Zakat collected from companies in Saudi Arabia is transferred to the Social Security Agency, Deputy Minister of Finance For Budget & Organizational Affairs, Yasser Al Quhidan, said in a radio interview.

“However, these Zakat fees sometimes cannot fulfill the requirements of the Social Security Agency, and are annually complemented from the state balances,” Al Quhidan noted.

Other proceeds from oversight and anti-corruption authority (Nazaha), traffic violations, and fees of government services are recorded as ‘other revenues’, he added.

Project spending was cut to 10% of the state budget, as 50% of budget goes for employee compensations, while the remaining portion is directed to the social security agency, and also to fulfill operating expenses of other business sectors and debt service.

Additionally, the reduction of Saudi project spending was driven by lower off-balance sheet financing, and that lower funding is needed as several projects have been already completed, like the housing program. Saudi funds undertaking the financing of several projects also came as a reason.

Saudi Arabia allocated higher capital expenditure in 2020 within Vision 2030 for housing programs, the National Transformation Program (NTP) as well as the industrial projects; developmental programs with an indirect impact on citizens in terms of increasing job opportunities.

Al Quhidan indicated that the first item of the balance sheet covers income tax, profit tax and taxes on capital gains, including foreign companies and non-resident firms.

Financing expenses are to cover the budget deficit either from reserves or debt, while reliefs cover all beneficiaries and not only nationals.

“The economic diversification is of an outstanding significance; the expenditure initiatives will support the economic growth in the short term,” he noted.

Saudi Arabia’s revenues for the 2021 state budget are estimated at SAR 849 billion, with forecast expenditures of SAR 990 billion and a deficit of SAR 141 billion, Argaam reported.