Saudi Arabia’s government adds 5% tax on some goods

2017年7月19日

Intermediate

Pre-reading questions:

  1. Do you think it is useful to know a bit about the economic status of other countries?
  2. Why do you think some people find it difficult to discuss the economy?

Vocabulary:

  1. exporter – someone who sells goods to another country
    India is a major exporter of rice.
  2. drastic – something that has a very big effect on another
    Our budget has been drastically reduced.
  3. impose – to force something to be accepted or to be done
    The chairman of the board imposed his decision on his team.
  4. adhere – to believe in and follow the practices of something
    It is our duty to adhere to the law.
  5. revoke – to take back, cancel or withdraw something
    His driver’s license was revoked yesterday.

Saudi Arabia is one of the top oil exporters in the world. However, the oil price in the world market has drastically declined. According to reports, the country hit a $97B budget shortage last year. To cope with the downturn, the Gulf Cooperation Council (GCC) and the Saudi Arabian government agreed to impose 5% tax on some items. This adheres to the recommendation of the International Monetary Fund (IMF).

Saudi Arabia started imposing personal income and corporate taxes in 1950 for both nationals and non-nationals. After six months, income tax on nationals was revoked. Another reform was put in place in 1975 to exclude foreign nationals from income tax. They did this to encourage more foreign workers to build infrastructure and develop the economy.

Comprehension Questions:

  1. What has drastically declined last year?
  2. Who is one of the top oil exporters in the world?
  3. What was the agreement between the GCC and the Saudi government?
  4. How much was Saudi Arabia’s budget shortage last year?
  5. Why were foreigners exempted from paying income tax in 1975?

Express Your Opinion:

  1. Do you think cost cutting is enough to combat a country’s budget deficit? Please explain your answer.
  2. Should foreigners be exempted from paying taxes? Please explain your answer.
  3. Is paying additional taxes a good solution to an economic crisis? Please explain your answer.
  4. How much should the government charge for consumption tax? Please explain your answer.
  5. If you were your country’s economic leader, how would you solve your country’s current economic problems?