DUBAI, Oct 26: Saudi Arabia’s finance minister said in remarks published on Saturday the oil-rich kingdom has no plans to tax the income of its nationals, but it was mulling a levy on foreign residents.

The government is not considering any such project at the time being, al-Eqtisadiah newspaper quoted Finance and National Economy Minister Ibrahim al-Assaf as saying.

However, Assaf said the country’s consultative body was studying a plan to impose an unspecified income tax on the kingdom’s army of millions of foreign workers.

The bill on foreigners income levies is being studied by the Shura Council, which will...then send it on to the cabinet, he said without giving further details.

Foreigners, mainly from Egypt and the Indian sub-continent, make up about a third of the 21-million-strong population.

The kingdom, with chronic budget deficits, expects to run up yet another deficit this year and its de facto ruler Crown Prince Abdullah warned his countrymen in February that the economy was in crisis.

The council has been mulling a measure that would slash corporate tax on foreign firms operating in the kingdom to around 30 per cent from 45 per cent.

Saudi firms and individuals are not required to pay any tax to the state, but they pay Zakat, an alms that amounts to 2.575 per cent of annual income, as required under Islam.

The International Monetary Fund as well some top economists have advised the welfare state to introduce various domestic taxes and other reforms to help diversify state income. They also urged Saudi Arabia to tackle its ballooning unemployment rate estimated at more than 15 per cent.

—Reuters