THE ATTITUDE OF THE SAUDI CITIZENS TOWARD THE IMPOSITION OF INDIVIDUAL INCOME TAX

This study investigated the attitude of the Saudi citizens to the establishment of a tax system whereby their personal income will be taxed. It was argued that imposing an income tax on the Saudi citizens will hold certain advantages for the Saudi economy and society such as: (1) resource allocation, (2) income redistribution, (3) stabilizing the economy, (4) enhancing the politcal awareness, etc. The Saudi government in 1950 imposed an income tax on its citizens which was objected to based on religious grounds. This led to its cancellation and instead, the imposition of a religious tax (the Zakat) which also became controversial. Today, even the Zakat is not collected by the government which instead encourages Saudis to pay it to specialized charitable organizations.;Questionnaires using the Likert scale were distributed to the two samples selected to generate the data needed. These two samples consisted of 700 governmental employees in five Saudi governmental agencies and 204 Saudi graduate students in the USA. The response rates were 68% and 47% for the civil servants and graduate students sample respectively. In this questionnaire the major reasons (financial or religious) for not having a tax, the tax system, and the tax preference were investigated.;Means, chi square ((chi)('2)) and regression analyses were used to test for the hypotheses proposed. Results of the means analyses showed that almost all the Saudi civil servants had a favorable attitude toward the imposition of tax with the exception of those who were classified as being over fifty years old. As related to the graduate students in the USA, they all had an unfavorable attitude.;The chi square analyses showed that attitude and the variables assumed to affect it (level and kind of education, level of income, age, and specialty) were dependent on each other in the case of the civil servants while they were found independent in the case of students. Also chi square analysis showed that the two samples are significantly different from each other. This difference is likely to be attributed to the student's exposure to a different environment where tax is a fact of life and subject to continuing controversy. Regression analysis confirmed the findings of both the means and chi square analyses.;The Saudis attitude toward a tax system will be influenced by a number of factors. For the purpose of this study, attitude is the dependent variable and level of education, kind of education (religious or nonreligious), level of income, age and academic specialty are the independent variables.;These findings show that the Saudi civil servants and the graduate students are different with regard to the attitude toward tax. Therefore, the homogenity of the Saudi society is questionable on this issue. Also the kind of education (religious and nonreligious) does not make a difference as far as being favorable or unfavorable to the tax issue. Furthermore, the results of this study indicate that the emphasized major reason for not having a tax is financial rather than religious.