Saudi considers income tax for expats, ECB buys bonds, Japan bank “revolts” against negative rates, Saudi
If you’re reading us from Saudi Arabia and you happen to be an expat, income tax may be in your future. The kingdom is looking to boost non-oil revenues and cut spending to fund its USD 72 bn plan to diversify the economy, according to the FT (paywall). But while taxing the one third of non-Saudi residents could rake in a significant amount for the government, it may make it more difficult to lure expats in the future. “The allure of Gulf countries for many expatriates is how much they can save, not spend, and how much they can remit back to their countries,” said Talal Malik, a Saudi-based consultant. However, Saudi finance minister Ibrahim Alassaf downplayed the possibility on Tuesday, saying “There will be no tax on citizens. As for residents [expats], it is a proposal and nothing has been approved yet, and it will be examined,” Alassaf said, adding rightly “It is an old proposal.”
The European Central Bank’s corporate-bond buying program kicked off yesterday. The bank bought debt issued by Anheuser-Busch InBev NV, Telefonica SA, Siemens AG, and Renault SA, among others. But there’s a significant amount riding on its credibility, say analysts. “The perception is that if they can’t buy at least [EUR 5 bn] of bonds a month, the program will be seen as unsuccessful,” said Victoria Whitehead, a Paris-based senior portfolio manager at BNP Paribas Investment Partners.