New financial burdens

Qaisar Metawea UNDOUBTEDLY, the steep drop in oil prices last year has greatly affected the Kingdom’s 2016 budget. There is an estimated deficit of SR326.2 billion. As a result, the state has raised the price of energy products, electricity and water tariffs to raise the state revenue and curtail the budget deficit. Aside from this, Minister of Finance Ibrahim Al-Assaf said a 5 percent value added tax (VAT) will be imposed gradually in two years. This package of taxation will definitely increase the financial burden on citizens now and in the future. However, there is a proposed plan that calls for optimism: the National Transformation Program. It will contribute to building a national vision whose goal is to double the nation’s economic capabilities and launch a package of economic and development reforms. The year 2020 has been set to measure the performance for carrying out the ambitious plans and programs by officials in government authorities. The National Transformation Program will take five years for its results to appear fully. The program is expected to increase per capita income and achieve more prosperity for citizens. However, during this period, they will have to deal with these financial burdens with only their original, limited income, not to mention the possibility of these increases causing the prices of commodities and services to rise, as merchants will pass on the hikes to the consumers. Therefore, it is expected that these increases imposed by the government will be met with an urgent plan, implemented now, to alleviate the burdens especially on citizens with limited income. Supervision of the markets will be tightened so as to prevent traders from increasing the prices of basic commodities. Apart from this, solutions for putting a limit to large increases on house rents will have to be implemented, as these annual hikes on rents by property owners are unjustified. Not only this, but there will be a need for strict monitoring of government agencies to prevent waste of public funds. This is all part of the National Transformation Program. An example of mismanagement of state funds was recently disclosed by the General Auditing Bureau: Over SR41 billion was spent without official receipts, or the authorities concerned neglected collecting the funds and depositing them in the state treasury. There are many forms of corruption that stretches the state budget. An iron fist policy should be implemented to put a limit to such malpractices, instead of avoiding tough measures against them as was the case in the past. At a time when we hope that the announced increases in charges for services will take place gradually during the next five years, we also hope that they will be met with an urgent plan to be implemented effectively as of now to mitigate the impact of these increases on citizens.