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Controversial Saudi tax on expat employees here to stay
| Published: | 5 Mar at 6 PM |
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Tagged: Australia, South Africa
The controversial Saudi Arabia financial penalty levy on firms employing more expats than local workers appears to be here to stay.
The generally unpopular tax was introduced in November 2012, and has been the subject of controversy and meetings between government ministries ever since. Introduced as part of the kingdom’s move towards Saudization of the workforce, the levy amounts to $640 per year per foreign worker in a country of which 90 per cent of employees are from overseas.
After almost four months of heated discussion in government, religious and business circles, it now seems that, according to a senior government official, the policy will not be reversed. The Middle East’s wealthiest businessman, Prince Alwaleed bin Talal, has praised the move, whilst the powerful Sharia Council has condemned it due to a lack of consultation and its potential harm to the economy.
The kingdom’s highest religious authority, Grand Mufti Sheikh Abdulaziz al-Alsheikh, joined the debate recently, saying that the Ministry of Labour should explain the logic behind the levy, adding that the decision lacked clear judgment. However, Saleh Kamel’s announcement of non-reversal of the policy and his threat that even tougher measures are on the agenda seem to have put an end to speculation, even although the estimated cost of the policy to the Saudi economy is running at US$ 60 billion.
The generally unpopular tax was introduced in November 2012, and has been the subject of controversy and meetings between government ministries ever since. Introduced as part of the kingdom’s move towards Saudization of the workforce, the levy amounts to $640 per year per foreign worker in a country of which 90 per cent of employees are from overseas.
After almost four months of heated discussion in government, religious and business circles, it now seems that, according to a senior government official, the policy will not be reversed. The Middle East’s wealthiest businessman, Prince Alwaleed bin Talal, has praised the move, whilst the powerful Sharia Council has condemned it due to a lack of consultation and its potential harm to the economy.
The kingdom’s highest religious authority, Grand Mufti Sheikh Abdulaziz al-Alsheikh, joined the debate recently, saying that the Ministry of Labour should explain the logic behind the levy, adding that the decision lacked clear judgment. However, Saleh Kamel’s announcement of non-reversal of the policy and his threat that even tougher measures are on the agenda seem to have put an end to speculation, even although the estimated cost of the policy to the Saudi economy is running at US$ 60 billion.
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