Saudi reform plan to be funded by spending cuts: minister

Saudi Arabia plans to finance parts of its $72 billion economic reform plan through spending cuts on existing projects, along with other efficiency measures, finance minister Ibrahim Al-Assaf said at a press conference Tuesday night.

Speaking during a panel session in Jeddah focusing on the recently unveiled National Transformation Program (NTP), Al-Assaf explained that initiatives outlined in the plan would take priority over other spending.

“Part of it will be made available from cancelled projects or projects that were downsized, and part of it will be made available from revenues that will rise – oil and non-oil revenues,” he was quoted as saying by Reuters.

The finance minister also backtracked from an initiative listed in the plan to impose an income tax on foreign residents, who constitute about a third of Saudi Arabia’s 30 million inhabitants.

“As for residents’ tax, it is a proposal, nothing has been approved yet and it will be examined,” he said.

Saudi Arabia’s finances have come under pressure since oil prices began declining in mid-2014, forcing the kingdom has had to seek new sources of income and make extensive spending cuts.

On Monday, the Saudi government unveiled the five-year NTP, part of the wider Vision 2030 initiative which aims to reduce the economy’s reliance on oil. The NTP, which will cost an estimated SAR 270 billion ($72 billion) to implement, includes over 500 projects and initiatives.