Riyadh – Decypha: The government of Saudi Arabia decided to reduce the income tax paid by Saudi Arabian Oil Company, known as Saudi Aramco, to boost the prospects of the company’s planned initial public offering (IPO).
A royal decree has decreased the company’s taxes by 50%, with a retroactive effect to January 1st 2017. Previously, Aramco had paid 85 percent tax, plus a 20 percent royalty levied at a different stage.
The move is expected to reduce the company’s tax burden by tens of billions of dollars, making it more attractive to investors, According to Reuters the move has been under consideration for months.
The Saudi government is planning to up to 5 % of Aramco, listing the shares in Riyadh and at least one foreign exchange. This is in line with the Kingdom’s plan to raise finances to invest in other sectors, helping the local economy expand beyond oil
Saudi Aramco’s IPO is expected to be the world’s largest equity sale.
By Decypha Editorial Team
