• 3 minutes Nucelar Deal Is Dead? Iran Distances Itself Further From ND, Alarming Russia And France
  • 5 minutes Don Jr. Tweets name Ukraine Whistleblower, Eric Ciaramella. Worked for CIA during Obama Administration, Hold over to Trump National Security Counsel under Gen McCallister, more . . . .
  • 9 minutes Shale pioneer Chesepeak will file bankruptcy soon. FINALLY ! The consolidation begins
  • 12 minutes China's Blueprint For Global Power
  • 2 hours Who writes this stuff? "Crude Prices Swing Between Gains, Losses"
  • 2 hours Pioneer's Sheffield in Doghouse. Oil upset his bragging about Shale hurt prices. Now on campaign to lower expectations, prop up price.
  • 10 hours Climate Change Consensus Shifts in Wind, But Gas Is Still the Right Move
  • 12 hours World oil demand will keep growing until 2030, climate-damaging emissions longer, says IEA
  • 12 mins EU has already lost the Trump vs. EU Trade War
  • 5 hours Iran Finds New Oil Field With Over 50 Billion Barrels: Rouhani
  • 3 hours Atty General Barr likely subpeona so called whistleblower and "leaker" Eric Ciaramella
  • 2 hours Joe Biden, his son Hunter Biden, Ukraine Oil & Gas exploration company Burisma, and 2020 U.S. election shenanigans
  • 2 hours Trump On Farage's Radio Show ...
  • 1 hour Does .001 of Atmosphere Control Earth's Climate?!
  • 7 hours Iran's Master Plan?
  • 13 mins China's Renewables Boom Hits the Wall
  • 5 hours Saudi Aramco IPO Will Not Save Kingdom

Breaking News:

Oil Rebounds On Surprise Crude Draw

Saudi Arabia Slashes Tax Rate For Aramco Preparing For IPO

Oil Rigs

Saudi Arabia is cutting the tax rate on Aramco to 50 percent from 85 percent in a bid to attract international investors for next year’s planned IPO of its oil giant and raise its valuation for the process.

A royal order introduces a new tax regime for all hydrocarbon producers operating in the Kingdom, Aramco said in a tweet, adding that the tax rate for Aramco has been slashed to 50 percent.

The high tax rate was one of the main reasons why international industry experts have not been valuing Aramco nearly as high as the $2 trillion Saudi officials have been claiming.

The new tax rate will bring Saudi Aramco in line with international benchmarks,” Saudi Aramco president and chief executive Amin H. Nasser said in an Aramco statement, commenting on the royal order.

In January this year, Nasser told Bloomberg Television in an interview that Saudi Arabia would definitely change the fiscal regime and taxes in order to align Aramco’s with that of other listed companies.

While the lower tax rate could spur investor interest, it could also reduce revenues for the Saudi government, some have argued.

Following the royal order, Saudi finance minister Mohammed Al-Jadaan said in a statement today that the lower tax would not hurt government finances.

Related: Fruitless OPEC Meeting Sees Oil Prices Edge Lower

Any tax revenue reductions applicable to hydrocarbon producers operating in the Kingdom are replaced by stable dividend payments by Government-owned companies, and other sources of revenue including profits resulting from investments,” Al-Jadaan said.

The 50 percent tax rate will be very lucrative to investors who should be gearing up for its privatization. This is one of many steps that will begin a process of investor-friendly initiatives that will help in whetting appetites,” John Sfakianakis, director of economic research at the Gulf Research Center Foundation in Riyadh, told Bloomberg in an emailed comment on the issue.

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage

Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play