The Kingdom increased VAT from 5 to 15 percent in July 2020 without damaging its economic growth, Minister of Economy and Planning Faisal Alibrahim said at the World Economic Forum in Davos.

“We look at simplifying tax revenues and utilizing them in a way that was never done before, but not at the expense of economic growth or economic development,” he said.

Speaking on a panel that discussed whether efforts to reform global tax systems were stalling, Alibrahim said Saudi Arabia “broadly supports” global tax reforms, such as those tabled by the Organization for Economic Cooperation and Development.

Almost 140 countries agreed to sign up to the OECD tax reform deal in October 2021, which aims to ensure multinational firms pay their fair share of corporate tax and prevent climate tax evasion.

Its two main pillars give countries taxing rights on digital profits and set a universal minimum corporation tax rate of 15 percent. The first is expected to generate between $13 billion and $36 billion in annual revenue for countries involved and the second about $220 billion.

Alibrahim said that despite some minor issues, the Kingdom regarded the OECD’s reform efforts as a “step in the right direction” as they were “underpinned by fairness.”

“This will push governments to think about true fundamentals of competitiveness and competition at the same time,” he said. “This will drive productivity and competitiveness, it will take us away from the environment that had that ‘race to the bottom’ focus on fiscal incentives.”

He added: “We have to make sure everyone is at the table, and listen to everyone and voices are heard. One thing we learned from the past seven years is collaboration does yield results.”

He said it was also important that countries adhered to the time frame for the implementation of the OECD agreement, which was set as the start of 2024.