Riyadh - Mubasher: Bloomberg has reported that Saudi Arabia is considering a flexible tax system for Aramco, the world’s biggest oil company.

The system would increase royalty payments when crude prices rise, people familiar with the deliberations have told the news agency.

The government is mulling a proposal from Saudi Aramco to replace the current fixed royalty on revenues, proposing to initially set the royalty at 20%, with an automatic increase if oil prices rise significantly, however, a decision has not yet been reached by the Saudi government

Saudi Aramco pays income tax on profit, which the government recently cut to 50% from 85%, Bloomberg indicated.

KSA is planning an initial public offering (IPO) for nearly 5% of Saudi Aramco's capital, an IPO that is set to be the biggest in the world.