Saudi Arabia Approves New State Revenues System

The Saudi Cabinet has approved an updated State Revenues System, establishing a unified legal framework for estimating, collecting and managing public revenues across government entities.

The system broadens the definition of state revenues to include income from natural resources and national assets, fees, taxes, charges, wages, privatisation proceeds, public-private partnerships, state asset sales and leases, financing and investment returns, fines, compensation, donations, grants, bequests, endowment income, zakat funds and other revenue sources approved by the Council of Ministers.

Under the new framework, the Ministry of Finance will be authorised to prepare state revenue forecasts for up to 10 fiscal years, using data and plans submitted by government entities. The ministry will also be able to revise projections periodically or in response to changing economic conditions.

The system requires government entities to collect revenues within the prescribed timeframe, record them during the relevant fiscal year and transfer receipts to the Ministry of Finance's account at the Saudi Central Bank in accordance with implementing regulations.

The framework also introduces new debt management procedures. Government entities must notify debtors on the first working day after a payment becomes overdue and begin legal recovery proceedings if the debt remains unpaid after 45 working days. The system allows revenue collection to be deferred for up to one year in emergency circumstances and states that government debts do not expire through statutory limitation.

In addition, the regulations permit partial or full waivers for debts of up to SAR 1 million under specified conditions, including verified inability to pay, while larger waivers require approval from the Prime Minister following a recommendation by the Minister of Finance. The system also allows debts to be repaid in instalments of up to 25 years, subject to value thresholds and ministry approval.