Milking it

28 March 2017 By Andy Critchlow

The kingdom has slashed its oil major’s tax rate to juice up a potential IPO. That could theoretically triple the company’s market value to well over $1 trillion. Yet because Saudi will keep a 95 pct stake, the state can recoup almost all of what it appears be giving away.

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Saudi Arabia’s government has cut the tax paid by national oil company Saudi Aramco to help smooth its planned initial public offering, it said on March 27.

A royal decree set a new income tax rate of 50 percent for Aramco, down from the previous 85 percent.

Top Saudi officials including Deputy Crown Prince Mohammed bin Salman have repeatedly said they value the company, which is the world’s largest oil exporter, at around $2 trillion.

"This move carries strategic benefits for Saudi Arabia, its citizens and future generations," Finance Minister Mohammed al-Jadaan said in a statement about the tax cut reported by Reuters.

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