Saudi Budget 2017: Beyond the fiscal balance objective
The budget is set to further the agendas defined in the Saudi National Transformation Program and the Vision 2030
With the announcement of its Budget 2017, the Saudi government is set to lay down a new program to achieve fiscal balance during the year to tackle the economic challenges facing the country without passing the burden to its citizens.
The budget is set to focuses on making capital and operational expenditures efficient, developing oil and mineral resources, increasing financial burden on expatriates, adding value-added taxes (VAT), enhancing fees on white lands and public debt management, as well as raising the efficiency of government support.
In other words, it will be furthering the agendas defined in the Saudi National Transformation Program and the Vision 2030. In light of the abolition of unapproved projects, worth a trillion riyals, the government has adopted more transparent measures for the budget after making progress in reducing the dependency on oil.
Economists are looking at fiscal balance as a measure of budget support that can raise the efficiency of the government spending to achieve its objectives in the easiest way. This has been one of the major pillars of the Vision 2030, which also reviews existing projects.
Efficiency of spending
The vision adopts mechanisms and assesses their economic impact besides raising the efficiency of spending and the development of non-oil revenues. Economists say that all indicators point toward a transparent and clear budget statement, in terms of deficit, revenues and appropriations.
Increasing non-oil revenue from SAR 163 billion to SAR 1 trillion is one of the important goals of Vision 2030 and has been set as a strategic objective. This is indeed going to be a major challenge and cannot be achieved without a comprehensive approach.
Deputy Crown Prince Mohammed bin Salman has repeatedly stressed the need for greater transparency and clarity. Levying of duties will be an integral part of the government revenues and will be critical in filling the gap in the funding of public expenditure and development projects and services.
It should constitute an important source of revenue for the state and contribute toward the achievement of a major part of the self-financing objective in the future.