New financial balance program to be launched with annual budget

By Saleh Al-Zahrani JEDDAH — The government will launch its program of “financial balance” for the year 2017 with the annual budget expected to be announced on Thursday, informed sources said. They said the program is aimed at confronting the current economic challenges without any adverse effects on citizens. The sources said the program will focus on raising the quality of the capital and rationalizing operational expenditure, boosting oil and mineral resources, making gains from the value added tax (VAT), benefiting from fees on expatriates and the levy on underdeveloped land. They said the program is also aimed at promoting the quality of the government subsidies and the implementation of the national transformation plans, including the Kingdom›s Vision 2030. According to the sources, the program is being launched at a time the provisions for a number of projects awaiting tender have been cancelled. These projects are worth more than SR1 trillion. They said the program is coming at a time the government is adopting criteria to ensure transparency in budget spending after achieving positive results from reducing dependence on oil revenue. A number of economists believe that the program will boost the government›s budget through rationalizing expenditures. They said the program constitutes one of the basic pillars that paved the way for the launching of the Vision 2030. The economists are of the opinion that the budget will be announced in complete transparency showing the deficit, the revenues and provisions. Fadl Saad Abu Al-Ainain, an economic analyst, said the financial balancing program is one of the important schemes introduced by the Council of Economic and Development Affairs (CEDA) to rationalize government spending and reduce dependence on oil. He said the program will boost the non-oil revenues, direct the government subsidies to the people who actually deserve them and ensure good governance of the public debt. “Under the program, the government revenues from the non-oil sector will go up from SR162 billion annually to about a SR1 trillion,” he said. Essam Khalifa, member of the Saudi economic society, said the program was based on the principle that permanent financing should be more or at least at the same level of the investments. He called for reviewing thousands of faltering and delayed projects in various parts of the Kingdom. Khalifa said the program, which enters it second year, has proved its effectiveness in increasing non-oil revenues.