[SAUDI OFW ALERT] Saudi Expat Tax Will Hit Both Workers & Businesses

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

As reported by Gulf News via Gulf Insider, starting next month (July 2017), the kingdom will 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.Advertisement

This new tax will apply to foreigners (and OFWs) who have families in Saudi Arabia and this will be collected on top of the existing monthly tax that some companies are already paying for expat workers.
There have been reports that some employers have already decided to charge the fees to employee’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 foreigner employees than local employees are currently spending 200 riyals every month for every foreign worker. 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.

It is estimated that the expat fees alone will generate 65 billion Saudi riyals for the kingdom by 2020. However, experts say that despite this income, the new tax will negatively impact the private sector including the contractors, the building material, the food and consumer products will increase prices… the citizen will be harmed… this will also harm the attractiveness of the work environment in the kingdom, a member of the Riyadh Chamber of Commerce and Industry said.

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