The Ministry of Finance in the Kingdom of Saudi Arabia is the entity responsible for proposing general fiscal policies and plans that support economic stability and growth, ensure the sustainability of government resources, enhance their efficient utilization, oversee their implementation, and coordinate with monetary and structural policies within the framework of development plans and strategic objectives aligned with the state’s general policy.
One of the ministry's primary roles is the preparation and implementation of the general budget. It also undertakes continuously developing financial, tax, and customs policies, and supervising the implementation of financial policies to strengthen the government's financial system, ensure efficient performance, and foster a competitive and stable financial environment. Additionally, the ministry carries out the key role of strengthening international partnerships and promoting bilateral and multilateral economic cooperation by entering into agreements with numerous countries.
Establishment of the Ministry of Finance
The Ministry of Finance is considered one of the first ministries in the Kingdom, established in 1925 during the reign of King Abdulaziz Bin Abdulrahman Al Saud as the 'General Finance Directorate for Managing Financial Matters' in the Makkah al-Mukarramah Province. As its responsibilities grew, it was reorganized into the 'General Directorate of Finance' in 1928 and its work expanded. Subsequently, a royal order was issued in 1932 transforming it into the Ministry of Finance, tasked with regulating and safeguarding state funds, managing collections and expenditures methods, and serving as the central authority for financial matters across the Kingdom. In 1954, the Ministry of Economy merged with the Ministry of Finance, resulting in the establishment of the 'Ministry of Finance and National Economy', with its headquarters relocated to Riyadh. In 2003, when economic activity was integrated into the Ministry of Planning, the ministry was renamed the 'Ministry of Finance'.
In alignment with the Kingdom's administrative development and modernization phase, various government directorates and departments were established under the Ministry of Finance. These include the General Directorate of Petroleum and Minerals, the General Directorate of Public Works, the General Directorate of Customs, the Directorate of Agriculture and Water, Hajj, Endowments and Broadcasting Affairs, the Office of Employees and Retirees, the General Directorate of Labor and Workers, the Institute of Public Administration, the Transportation and Communications Agency encompassing the Telegraph and Postal Directorates, the Roads Authority, and the Railways. There are also various development funds, such as those for real estate, industrial projects, credit, the Agricultural Bank, and public investments. Additionally, there are government departments including the Department of Zakat and Income, Retirement, and General Statistics, along with offices for companies and urban projects.
Over more than eight decades, thirteen ministers have served in the Ministry of Finance, with Abdullah Bin Sulaiman al-Hamdan being the first Minister of Finance.
The ministry has implemented numerous major national and development projects, notably including the expansions of the Grand Mosque and the Prophet’s Mosque, the King Fahd Causeway linking the Kingdom to the Kingdom of Bahrain, Princess Noura Bint Abdulrahman University, conference centers, government complexes, shelter centers in various cities across the Kingdom, as well as border crossings and residential cities.
Organizational structure of the Ministry of Finance
The Ministry of Finance is headed by a minister appointed by royal order, who serves as the primary official responsible for it and is a member of the Council of Ministers. The ministry carries out its duties through its deputyships, departments, and branches across the Kingdom's provinces.
The vision of the Ministry of Finance is to enable the Kingdom to become one of the world's fifteen largest economies by 2030 through a distinctive fiscal system. Its mission is to develop effective fiscal policies and manage financial resources to achieve stability, economic growth, and fiscal sustainability, increasing spending efficiency, and strengthening partnerships with the private sector through effective governance; as well as supporting the Kingdom's influence on the regional and international financial community
The ministry's strategic objectives are based on five pillars and three enablers: Developing sustainable fiscal policies, allocating and managing financial resources effectively, improving the quality of financial accounts and promoting transparency, optimal utilization of state assets, and promoting the Kingdom's position regionally and internationally by enabling the ministry's digital transformation, qualifying human resources within a productive environment, and promoting change and communication.
Stages of preparation of the state's general budget
The Ministry of Finance undertakes the task of preparing the state’s general budget through institutional processes that adhere to technical and temporal controls, aligning with the ministry’s mission, strategic objectives, the government's aspirations, and the goals of Saudi Vision 2030.
The budget preparation timeline starts at the end of December of the preceding fiscal year and continues into the following month of January. By early February, the main budget directions are determined until mid-March. The ministry enters the review and analysis phase until the end of April and discusses the budget from May until the end of August.
Budget approval follows a three-stage process: initial analysis throughout July, August, and September, followed by the final approval during October and November, and culminating in its official announcement in December.
The Ministry of Finance follows four tracks to implement the budget and disseminate its instructions by announcing and implementing it through collecting revenues and expenditures, quarterly performance estimation, and preparing the final accounts for entities to submit their accounts at the end of the fiscal year.
To enhance transparency and disclosure in budget preparation, the ministry has issued a number annual, semi-annual, and quarterly reports. These reports contribute to the Kingdom's ratings in international indices and benefit the private sector by providing detailed analyses and data on revenue and expenditure movements, as well as information on surpluses, deficits, and public debt.
Tasks of the Ministry of Finance
The Ministry of Finance undertakes the tasks of the state treasury by monitoring and collecting public revenues, developing and diversifying them, improving collection methods, overseeing the implementation of financial policies and legislation, as well as approved tax systems, conducting pre-disbursement financial control, and enhancing its systems and tools to ensure compliance with government spending laws and instructions and promote accountability and preservation of public funds. The ministry supervises the government’s annual accounts and expenditures, prepares the state’s final account, facilitates international development loans, grants, and deposits, and provides subsidies for goods as determined by specific subsidy decisions and instructions.
Among the ministry's responsibilities are the preparation of the state's draft general budget and its implementation rules, coordination with various government agencies, evaluation of budget projects for alignment with adopted development plans and standards, oversight of implementation, continuous development of preparation mechanisms, and management of public spending to enhance efficiency and returns. The ministry also formulates policies for managing budget surpluses, develops legislative and regulatory frameworks for government tenders and procurement, monitors compliance, proposes government borrowing policies, oversees their implementation, contributes to setting and refining the Kingdom’s public debt policy, manages debt, strengthens financial reserves, and oversees government loan collections.
Additionally, the ministry implements government decisions regarding local and foreign subsidies and aid, follows up on that in coordination with relevant government entities, develops bilateral, regional, and international financial and development cooperation, represents the Kingdom in regional and international financial institutions, the G20, and other regional and international financial councils and committees, participates in studying bilateral and international agreements relevant to its operations, prepares, drafts, and amends government laws, contributes to conducting financial and regulatory studies for the state, cooperates and coordinates with the Saudi Central Bank to align financial and monetary policies in support of the national economy, and undertakes megaprojects as assigned by the King, such as the expansion of the Two Holy Mosques and the Holy Sites.
Related quizzes
