Saudi finance minister says oil tax cut has ‘strategic benefits’

Saudi Arabia’s decision to cut taxes imposed on state-owned Saudi Aramco is in the country’s interests and will not hurt public finances, the kingdom’s finance minister Mohammed Al-Jadaan said in a statement.

Any tax revenue reductions resulting from this decree will be offset by stable dividend payout by the state-owned companies, in addition to other sources of revenue including profit resulting from investments, the minister said.

Saudi Arabia has issued a royal decree, setting a range of income tax rates for oil and hydrocarbon producers in the kingdom.

Taxes for investments exceeding $100 billion (SAR 375 billion) will stand at 50 percent.

Under the directive, Saudi Aramco’s income tax rate has been cut to 50 percent. The oil giant is said to have previously paid 85 percent.

Aramco CEO Amin Nasser said on Monday that the move to slash taxes is “positive,” and will enable the state-run oil producer to achieve compliance with international tax rates.