Riyadh: Saudi Arabia is seriously considering to reduce subsidies on energy and water for wealthy citizens. Apart from subsidy cuts, it is also planning to impose value added tax (VAT) and taxes on unhealthy goods like cigarettes and sugary drinks, Deputy Crown Prince Mohammad Bin Salman was quoted as saying on Wednesday.
In an interview with the New York Times, he could foresee oil prices dropping far below their current level of around $45 a barrel.
Despite the continuous dropping of oil prices in the international market, he sounded confident about the revenues. According to him, "So even if oil falls to $30 a barrel, Riyadh will have enough revenues to keep building the country without exhausting its savings."
"The key challenges are our overdependence on oil and the way we prepare and spend our budgets," he said during the interview with the New York Times.
According to the newspaper, the Deputy Crown Prince is also likely to privatise and tax mines and undeveloped land, and intended to reduce domestic oil consumption by installing nuclear and solar electricity capacity, without giving further details.
Mohammed bin Salman, who is also defence minister, heads a supercommittee on the kingdom's economy and development as well as a National Performance Centre that oversees efficiency in all government ministries.
It is pertinent to know here that under King Abdullah, who died in January, Saudi Arabia privatised big state companies, opened main sectors of the economy to private and foreign investment, joined the World Trade Organisation and reformed labour laws.
The economists, however, are of the opinion that the government can do more to strengthen the role of Saudi nationals in the private sector economy including via education reform.
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