Saudi Arabia approved a new tax regime for oil and natural gas producers on Monday. Under the new regime hydrocarbon companies will be taxed depending on their capital, therefore companies with capital of more than SR375 billion will pay 50 percent income tax, those with capital between SR300 billion and SR375 billion will pay 65 percent tax, those with capital between SR225 billion and SR300 billion will pay 75 percent of tax and those with capital below SR225 billion 85 percent of tax. The consequence will be a boost of Saudi Aramco’s valuation and it will see its income tax fall from 85 percent to 50 percent. The new rates will also put the company in line with international benchmarks and the new rate is effective retroactively from Jan. 1. Moreover future investrors interested in buying Saudi Aramco shares will see more clash flow. In fine the government will not lose income due to the fact that any reduction in tax is replaced by stable dividend payments.