‘Saudi Arabia’s expat tax to hurt foreign workers, businesses’ | daily-sun.com

‘Saudi Arabia’s expat tax to hurt foreign workers, businesses’

    14th June, 2017 09:04:02 printer

DUBAI: The expatriate levy in Saudi Arabia will be a financial burden on both foreign workers and businesses, analysts have said.


Starting next month, the kingdom is set to start collecting a new monthly fee of 100 riyals (Dh97.93) for every expat dependent, with plans to increase the fee gradually next year until 2020, reports gulfnews.com


The newly introduced fee will apply to foreigners who have families in Saudi Arabia and will be collected on top of the existing monthly tax that some companies are already paying for expat workers.


It is not clear who will shoulder the new levy, but there have been reports that some employers have already decided to charge the fees to staff’s monthly pay. “I suppose in most cases it will be borne by expats,” M.

R. Raghu, executive vice president for Kuwait Financial Centre “Markaz,” told Gulf News.


Companies that have more foreigners than locals on their payroll are currently spending 200 riyals every month for every expatriate. The fee is applicable only to foreign workers that exceed the number of Saudi staff. Between next year and 2020, the tax will gradually increase. The fee will also be collected across the board, and will not just apply to employers heavily dependent on foreigners.


“For expatriate employees not exceeding the number [of] Saudi employees, the fee will no longer be waived but will be levied at a discounted rate,” PwC said in its briefing paper.


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